Digital Assets Ease Payment Issues Between Russia and China

July 26, 2024

Digital assets are being used more and more in cross-border transactions between Russia and China. This is mostly because traditional banking has been slow for a long time because of international bans. Qifa, a digital tool, has come up as a way to solve these payment problems by using cryptocurrencies to speed up transactions.

Overview of Qifa

When Qifa was first started in 2013, its main goal was to bring Chinese goods into Russia. As the economies of the two countries changed and trade between them grew, Qifa changed its focus to make trade between the two countries easier in 2023.

Sanctions and Payment Delays

Because of the sanctions, bank transactions are taking a long time. Some payments are taking months. Chinese banks have made it harder for Russian companies that don’t know about these new rules to make payments because they have to follow more rules.

Use of Digital Assets

To deal with these problems, Qifa has turned to digital asset transactions, especially using the stablecoin Tether (USDT). By going around standard banking systems, this method of payment makes transactions possible quickly—often in just one day.

Legislative Developments

Russia is thinking about passing laws that would allow cryptocurrencies to be used in international trade. This would make deals involving digital assets even more legal and speed them up. Qifa is closely watching the rules in both Russia and China to make sure they are followed.

Compliance Issues

More checks for compliance have slowed down payments, which has made process times longer. One thing Qifa says is that many Russian businesses are starting to adjust to these rules, but problems still exist with paperwork and products that can be used for two different things. Qifa wants to go public on the Moscow Exchange and is looking into business chances in Kazakhstan and other former Soviet countries. This shows a bigger regional goal at a time when international trade is changing.

About Bilateral Trade

When two different countries trade with each other, this is called bilateral trade. It can make economic ties stronger, which usually leads to trade deals that lower taxes. In particular, trade between the US and China is very important and makes up a big part of all trade in the world. Foreign investment can grow with the help of bilateral trade deals. Surprisingly, about 60% of all trade in the world takes place through regional deals instead of bilateral ones. A lot of emerging countries also depend on trade between two countries to grow their economies.

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