Over the past two years, barter trade has regained attention in international markets. As the Russia-Ukraine conflict persists, the Middle East situation remains volatile, and financial sanctions and cross-border payment restrictions increase, some companies find themselves with goods to sell and commodities to buy, yet discover that standard payment collections and remittances are becoming increasingly difficult. Consequently, barter trade has reemerged as a way to sustain business. Even more noteworthy is that digital technology and virtual currencies are opening up new spaces for barter trade and may weaken the effectiveness of traditional financial sanctions.
Russia is a classic example. In September 2025, a Reuters investigation found that Russian companies had returned to countertrade, including exchanging wheat for Chinese automobiles, flaxseed for Chinese home appliances and building materials, and metals for machinery and equipment. The report verified eight related transactions. In 2024, Russia's Ministry of Economic Development even specifically issued a guide on foreign barter trade. Russian customs authorities believe that the share of barter in overall trade remains very small, and there is a lack of reliable aggregate transaction data from outside observers. This is likely the reality, and it is very probable that the actual trading scale is far larger than the statistical figures indicate. Nevertheless, these cases still demonstrate that when traditional payment channels are blocked, enterprises will actively seek out alternative trade arrangements.
Russia is not an isolated case; actual barter trade is thriving in today's world and may become even more prevalent in the future. In September of this year, Reuters disclosed that Iran, through a barter-like arrangement, converted oil sales revenue into credit lines for purchasing Chinese goods, which is a form of bilateral bookkeeping, to procure equipment and other commodities. The report stated that the funds flowing through this arrangement over the past year amounted to roughly USD 2.0 billion to USD 2.5 billion. Because such arrangements lack complete public disclosure, this figure should still be viewed with caution. Putting oil exports, import procurement, and trade credit into the same system indicates that barter today has become quite complex. Goods are not necessarily exchanged directly; instead, claims can be established first, with delivery completed by other enterprises.
ANBOUND's founder Kung Chan believes that the importance of barter trade in today's world has drastically increased. The three major elements of the internet, matching algorithms, and virtual currencies have lowered the costs of finding trading partners and commodities. In particular, virtual currencies spawned by digital technology have provided new accounting and settlement tools for multilateral transactions, stimulating the development and growth of barter trade. According to Chan, the combination of these three elements enables barter trade to break through the limitations of past small scale and low efficiency, and is creating a new landscape for international trade. From the perspective of strategic policy, perhaps more importantly, it may also substantially weaken the control capacity of traditional financial sanctions over international trade in the future, thereby affecting the trajectory of future international conflicts and even wars.
The most difficult aspect of traditional barter is that the demands of both parties must precisely match. In this regard, internet platforms can centralize supply and demand information from different industries and countries, use algorithms to find commodities that can complement each other, and even connect multiple enterprises across sectors into a trading chain.
Even after finding a trading partner, transactions still inevitably depend on valuation and settlement. Determining the number of cars that can be exchanged for a batch of steel, for example, and calculating price differences between machinery and agricultural products are essential to the process. With ten different commodities, there are already 45 pairwise price relationships to establish. If the number of commodities increases to 100, the number of possible price combinations rises to 4,950. If commodities are indivisible or costly to store, these factors further constrain the scale of traditional barter.
However, digital tools are changing this landscape. Through digital credit lines, platform accounting units, or stablecoins, enterprises can record claims formed by commodity exchanges and then use them for other transactions. For example, A needs B's products, B needs C's raw materials, and C in turn needs A's equipment. The platform can record the claims and liabilities of all parties and then conduct rapid clearing through multilateral offsetting, thereby realizing and completing the transaction. Enterprises do not need to find direct exchange partners every time, nor do they need to route capital transfers through traditional banks for every transaction. Digital bookkeeping allows claims formed by commodity transactions to be recorded and offset, while virtual currencies provide new payment channels for some cross-border transactions. The combination of the two enables traditional barter trade to develop into a more complex multilateral transaction system.
In fact, the profound changes pointed out by Chan can already be seen in digital asset transaction data. A report by blockchain analysis firm Chainalysis shows that less than a year after its launch, the on-chain transaction volume of the Russia-related ruble stablecoin A7A5 has reached approximately USD 93.3 billion. The U.S. Department of the Treasury disclosed in October of this year that agencies of the Russia-related A7 cross-border financial network processed more than USD 17 billion in transactions between January 2025 and June 2026. The statistical scopes of the two sets of data differ and cannot be added together, nor can they be entirely regarded as true trade volume, but they illustrate that alternative settlement networks have attained a certain scale, providing sanctioned enterprises and countries with channels outside the traditional banking system. This also demonstrates that alternative digital settlement networks have begun to establish practical links with energy trade and commodity procurement. The combination of digital currencies with transaction methods such as countertrade is entirely capable of further extending and expanding the scope of application of traditional barter trade.
This development will undoubtedly have significant implications for traditional international trade and the sanctions system.
In the past, the United States and Europe could exert considerable influence over sanctioned countries through the banking system, dollar-based settlements, and international payment networks. Even when companies had goods to trade, they might abandon transactions because they were unable to receive payments. Today, digital assets and multilateral netting arrangements offer businesses more alternatives. Whereas sanctioning authorities could previously restrict access to conventional financial channels, it is becoming increasingly difficult to disrupt all commodity trade simply by blocking payment channels. As long as demand persists in international markets, energy, agricultural products, and certain industrial goods may continue to be traded through alternative arrangements.
The West had already recognized this challenge and begun incorporating digital assets into the sanctions. As part of its sanctions against Russia, the European Union has designated the Russia-linked stablecoin A7A5 and its associated operating entities as targets of restrictions. The US Treasury has also taken action against related digital financial networks. Whereas sanctions previously focused primarily on banks and cross-border payment systems, authorities must now contend with constantly evolving digital asset networks, trading platforms, and financial intermediaries. Sanctions and countermeasures are thus extending beyond traditional finance into the realms of digital assets and technology platforms. Nevertheless, the use of digital assets does not mean that sanctions have become entirely ineffective. On-chain transactions remain traceable, although tracing may ultimately lead only to pseudonymous identities. Trading platforms and financial flows may also remain subject to regulation. When it comes to critical technologies, industrial equipment, and restricted goods, resolving payment difficulties does not necessarily guarantee access to the physical products themselves. The effectiveness of sanctions ultimately depends not only on control over financial channels but also on the ability to regulate the supply of goods, technology, and transportation.
More worth noting is how these changes might affect warfare. Modern warfare requires sustained capital input, as well as energy, food, industrial raw materials, and various equipment. An important objective of financial sanctions is to weaken the economic capacity of belligerent countries to sustain warfare. If digitalized barter and virtual currency settlement can maintain a portion of external trade, sanctioned countries may continue to obtain commodities and services corresponding to export revenues, reducing the shocks experienced by their war economies. The effect of economic blockades in forcing adversaries to change policies may consequently be restricted.
This means that the ability to sustain future wars may increasingly depend on maintaining alternative international trade and payment networks. Financial sanctions are traditionally intended to weaken a belligerent country's economic capacity by restricting trade and payments. However, as digitalized barter and alternative settlement networks continue to develop, some of this pressure may be offset, potentially altering the balance of power between sanctioning and sanctioned states. This, in turn, could have implications for the duration of conflicts and the terms of eventual negotiations. Of course, the course of a war ultimately depends on a range of factors, including battlefield developments, industrial production, logistical support, and external assistance. Digitalized barter is simply one additional variable that warrants close attention.
For China, barter trade brings both opportunities and risks.
China possesses a comprehensive manufacturing ecosystem and enjoys significant advantages in the supply of goods such as machinery, automobiles, and electronic products. Digitalized barter and multilateral trade clearing could create new opportunities for Chinese businesses to participate in international markets. However, such transactions still involve challenges relating to valuation, creditworthiness, foreign exchange management, and sanctions compliance. Acquiring goods that are difficult to resell or being unable to settle transactions in a compliant manner may mean that growth in the nominal value of trade does not necessarily translate into actual economic returns. China should therefore closely monitor technological developments and emerging business models in this field while strengthening compliant cross-border payment systems, trade financing, and clearing services.
The resurgence of barter trade reflects the fact that digital technology is changing international trade's dependence on the traditional financial system. As a result, the role of traditional economic blockade strategies in real trade scenarios and warfare scenarios will face reevaluation.
Final analysis conclusion:
Digital technologies and virtual currencies are creating new opportunities for the development of barter trade. Digital record-keeping and multilateral clearing allow certain trade transactions to become less dependent on traditional banking channels, potentially reducing the constraints that financial sanctions impose on commodity trade. These developments could also affect the ability of sanctioned countries to sustain wartime economic activity and influence their negotiating positions. China should therefore pay close attention to the role of digitalized barter trade in shaping the international sanctions system and war economies, as well as its potential long-term implications.
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Yang Xite is a Research Fellow at ANBOUND, an independent think tank.
