The Merkle

Ukrainian Firm Looks at Bitcoin to Bypass Sanctions

There are many reasons why companies should or could accept Bitcoin payments. One would be to attract more customers from around the globe, or even to reduce overhead costs. For Ukrainian shipping company Varamar Ltd., the main reason is very different. This company is using Bitcoin as a way of avoiding sanctions. It is an interesting approach, though one that may lead to some repercussions down the line.

Bitcoin can Save Businesses in Various Ways

When the news broke about this Ukrainian shipping company looking into Bitcoin payments to circumvent sanctions, a lot of people were actually surprised. Then again, there is still a misconception that Bitcoin isn’t suited for payments or business transactions, despite that clearly being not the case. For this particular company, accepting payments denominated in the world’s most popular cryptocurrency will help it avoid significant paperwork associated with international payments and reduce fees for all parties involved.

It is commendable that Varamar Ltd. is considering Bitcoin as a payment method for any reason. However, the company also sees this payment option as a tool for avoiding some of the sanctions imposed on specific countries where companies want to do business with Varamar. Due to these sanctions, such clients cannot pay the firm through traditional means, which means an alternative solution needed to be found.

Rather than doing business under the table, the firm wants to play it safe by using Bitcoin. While the world’s leading cryptocurrency isn’t legal tender in the Ukraine, it’s not prohibited as a payment method either. Using Bitcoin, both parties can still use official contracts for services rendered and anyone can see the money changing hands. The public nature of Bitcoin’s blockchain will certainly be an asset in this regard.

It is certainly true that dealing with traditional bank payments can be quite a hassle for most businesses. This problem is compounded in the shipping industry, as stacks of paperwork are complex and time-consuming to draft. Bitcoin is a faster payment method which requires fewer documents while still providing a major service to clients across Russia, Yemen, Pakistan, and elsewhere. It will be interesting to see if this decision affects the company’s business model at all, since this is not the most legal way to go about things either.

For the time being, there is no official confirmation that Bitcoin will be used as a payment method by this Ukrainian shipping firm. Rather, it is merely contemplating the option and its possible benefits or repercussions. All of this does show there is a lot more to Bitcoin than just the speculative aspect, which is the only thing the media talks about these days.

Though it is not the most convenient payment solution in its current form, Bitcoin is still improving every single year. There is no reason to think this form of money won’t make an impact on the shipping industry or any other business. However, it remains to be seen if Varamar Ltd. faces any backlash due to this project. Sanctions are often imposed upon countries for very good reasons, and circumventing such measures is always a tricky move.