Trade between Russia and China adapts to sanctions

The rise in digital assets is helping Russia and China overcome payment difficulties caused by sanctions. Qifa, a digital platform established in 2013, has shifted its focus from importing Chinese goods to facilitating bilateral trade. As sanctions complicate direct bank settlements, Qifa has turned to digital currencies and cryptocurrencies to speed up transactions.

Payments between the two countries face delays of one to three months due to increased compliance checks from Chinese banks. Many banks are cautious of secondary US sanctions, leading to bottlenecks and the need for alternative methods like small regional banks. Digital currencies like tether now play a crucial role in easing these issues, allowing for quicker settlements.

Russia’s legislation is adapting to the use of digital financial assets for cross-border payments. This includes considering a bill to legalise all cryptocurrencies for foreign trade. These changes aim to bypass traditional banking systems and avoid long payment delays, providing a more efficient solution for businesses.

Qifa is set to list on the Moscow Exchange and is expanding its operations to Kazakhstan and other former Soviet countries. Western sanctions continue to affect trade, especially concerning dual-use goods that could support Russia’s military. However, companies like Qifa are finding innovative ways to maintain and grow their business despite these challenges.