USDT Cross-Border Settlement: Don’t Throw the Baby Out with the Bathwater
USDT cross-border settlement is not the whole story
USDT cross-border settlement helps keep trade moving when local currencies lose value or banking access is limited. Cash and hawala still handle local payments; stablecoins help intermediaries balance obligations across borders. Criminal and terrorist networks can abuse this rail, as the Senate report documents, but 846 sanctioned wallets cannot represent all USDT use. The tool is not the user: we should target criminal networks while preserving a payment tool that helps families and businesses keep going.
In countries facing economic turmoil, USDT can also help people preserve value, receive money, pay suppliers, and keep business moving. Venezuela is a clear example. Reuters has reported that Venezuelan exchanges and private businesses have turned to dollar-linked crypto as hard currency became scarce and import payments became harder.
For a broader look at how stablecoins connect domestic payment systems to global commerce, see our article on stablecoins and cryptocurrency in the U.S. and Europe.
What the Iran USDT report shows—and what it misses
The report examined 846 wallets that U.S. or Israeli authorities attributed to Iran’s government or regional proxies. It found that 84% had transacted exclusively or almost exclusively in USDT. That shows heavy use in this selected, sanctions-linked group. It is not a survey of all Iranian or Russian businesses, all hawala activity, or all USDT transactions.
The report traces specific networks and raises serious questions about delayed freezes. Those cases deserve scrutiny. But the sample cannot tell us how much legitimate trade uses the same settlement rails.
USDT, sanctions, and legitimate cross-border trade
Sanctions are meant to pressure governments and networks involved in prohibited conduct, including terrorism and sanctions evasion. The work is to identify those organizations, trace their money, and dismantle them. A payment in USDT, by itself, does not prove a customer is part of one of those networks.
A blockchain shows an address sending USDT to another address. It cannot, by itself, explain the full commercial purpose, who ultimately benefited, or whether brokers were settling earlier obligations. Transaction volume and token choice are signals to investigate—not proof of intent.
USDT can be used for crime. So can cash, banks, and every other tool used to move value. That is not a reason to throw the baby out with the bathwater.
Stablecoins are tools for trade. In places where the currency is failing or access to dollars is limited, they can help people and businesses keep going. I facilitate trade, and I believe facilitating trade is a good thing.
Sources
- Reuters: “Tether USDT aids Iran funding, Senate report says”
- U.S. Senate Permanent Subcommittee on Investigations minority-staff report: Tethered to Terrorism: Crypto & Iran’s Shadow Banking Network
- Reuters: “With dollars scarce, Venezuela currency exchanges turn to crypto”
