Stablecoins are reshaping the global trade landscape

A recent research report has conducted an in-depth analysis of the impact of stablecoins on global trade, particularly focusing on how they are changing the trade patterns of sanctioned countries and the increasingly important role they play in legitimate financial infrastructure.

Main Findings

• Stablecoins have become a practical financial infrastructure in high-risk cross-border transactions, with their use in Russian oil trading as a prime example.

• Despite the restrictions on domestic cryptocurrencies, China and India have indirectly experienced the efficiency of decentralized finance through stablecoin transactions with Russia.

• Governments around the world are adopting different response strategies, but there is a general recognition that stablecoins are changing the way cross-border value flows.

Stablecoins: From Marginal Tools to Strategic Currencies

The importance of stablecoins has been continuously rising, evolving from a tool for personal speculation to a practical tool for institutions, and has now become a national strategic choice. It originally gained popularity in cryptocurrency trading, and then expanded into areas such as cross-border payments between enterprises and the distribution of salaries in emerging markets.

Compared to traditional bank transfers, stablecoin transactions are settled almost in real-time, without intermediaries, significantly reducing costs. This makes it an important tool for businesses in politically and economically unstable regions.

Today, countries facing sanctions or seeking alternatives to the US-dominated financial system are testing stablecoins at the national level. The role of stablecoins has evolved from a convenience tool to a strategic necessity.

The Practical Application of Stablecoins in Global Trade

Some countries are incorporating stablecoins like USDT and major cryptocurrencies like Bitcoin and Ethereum into their oil trade. This practice aims to bypass Western sanctions and ensure trade continuity.

The trading model is relatively simple: the buyer transfers their domestic currency to an intermediary, which converts it into digital assets and then transfers it to the exporter to be exchanged for domestic currency. This process bypasses Western financial institutions, reducing the risk of sanctions.

In these transactions, stablecoins are particularly important. Compared to the price volatility of Bitcoin and Ethereum, stablecoins like USDT offer price stability, high liquidity, and ease of transfer, making them an ideal choice for cross-border settlement.

It is worth noting that while some countries still maintain a strict attitude towards the use of domestic cryptocurrencies, they seem to tacitly allow stablecoin transactions in specific trade contexts. This pragmatic approach reflects a priority on maintaining supply chain stability.

Other sanctioned countries are also turning to the use of stablecoins to maintain international trade, indicating that the use of stablecoins as a tool for maintaining commercial functions is on the rise. Even if sanctions are eased, settlement based on stablecoins may continue to be used due to its operational advantages.

Global Stablecoin Development Trends

Multiple countries are accelerating the exploration of stablecoin applications, motivated by factors including evading sanctions, enhancing monetary sovereignty, addressing geopolitical changes, and improving the efficiency of cross-border transfers.

• Some countries have approved the trading of stablecoins such as USDT and USDC.
• Some countries are establishing regulatory frameworks for their own stablecoins.
• Some banks in certain regions are preparing to issue local currency stablecoins.
• The United States has no comprehensive legislation yet, but related bills have been proposed.

These developments indicate that stablecoin regulation has moved from conceptual discussions to practical implementation, with governments around the world actively shaping their legal and operational frameworks. At the same time, the strategies adopted by different regions also show a trend of differentiation.

Despite the differences, there is a global consensus that stablecoins are becoming an important part of financial infrastructure. Some countries see them as a challenge to sovereign currencies, while others view them as a tool to enhance the efficiency of global trade.

Stablecoin: The New Financial Infrastructure

The growth of stablecoins in cross-border transactions reflects a fundamental shift in financial infrastructure, rather than a simple attempt to evade regulation. Even countries that have traditionally been skeptical of cryptocurrencies are beginning to utilize stablecoins in strategic trade.

This development has gone beyond the scope of sanctions evasion. Stablecoins are evolving from retail-level experiments to integration at the institutional and even national level, becoming one of the few blockchain innovations that demonstrate real application value.

Institutions that view stablecoins as fundamental elements of future financial architecture may gain an advantage in the next wave of financial innovation. Conversely, latecomers may face the risk of passively adapting to standards set by others. Therefore, policymakers and financial leaders need to gain a deep understanding of the nature and long-term potential of stablecoins, and formulate strategies that align with the evolution of the global financial system.