Digital platform Qifa told Reuters that while certain settlements directly through banks are taking months to clear owing to sanctions, the rising usage of digital assets in cross-border settlements between Russia and China is easing bilateral payment concerns.

Chinese-owned Qifa was established in 2013 with the primary goal of bringing Chinese consumer products into Russia. However, it started bilateral commerce this year, capitalising on the booming bilateral economy despite the possibility of more U.S. sanctions on Chinese banks complicating payment flows through stricter compliance requirements.

There are payment bottlenecks and more complicated measures to prevent delays as a result of the declining number of Chinese banks willing to take the chance of sanctions retaliation. One alternative is to employ tiny, regional Chinese banks that can operate covertly.

Qifa, a Beijing- and Moscow-based company that plans to list on the Moscow Exchange, has resorted to same-day cryptocurrency and digital asset settlements in order to overcome these obstacles.

Sun Tianshu, the creator of Qifa, stated that the firm was already enabling cross-border payments using tether (USDT), a so-called “stablecoin” that maintains a constant value in dollars, and that it was attentively observing laws on both sides of the border.

Russia permits the use of digital currencies like tether for transactions that eschew the banking system. Additionally, a measure to legalise all cryptocurrencies as payment methods for international trade is being considered by the Russian parliament.

As the likelihood of a Donald Trump administration increased due to an assassination attempt on the Republican nominee, shares of cryptocurrency companies, prison operators, and other companies that stand to gain from a Trump government surged on Monday.

According to deputy board chairman Kyle Shostak, “payment delays are due to the fact that many Russian counterparties have faced increased compliance from Chinese banks for supplies to Russia,” in an interview. “Many Russian counterparties are not completely used to such practices and don’t know how to respond to these requests.”

Payments used to take a maximum of one or two days, but according to Tianshu, now days they might take up to three months because of different processes and checks. Transactions can occasionally be hampered by inadequate paperwork, but businesses are starting to adjust.

“There is a good trend now – many payments and many companies that passed these checks have correctly compiled the packages of documents,” Tianshu said in the same interview.

But further delays might result from questions about whether some items are dual-use, according to Tianshu.

The export of dual-purpose items to Russia that may be used to prolong the crisis in Ukraine is forbidden by Western sanctions. The U.S. administration views China as a vital worldwide centre where Russia may obtain supplies for its armed forces, including drone components and chips.

On Thursday, Qifa said that the price range for its offering on the Moscow Exchange will be 92–110 roubles, or $1.08–$1.29 per share. It stated that it is examining the progress made in Kazakhstan and other former Soviet nations.

(Adapted from USNews.com)

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