A Ukrainian shipping company has become the first to accept payment in bitcoin. Its motivation for taking the digital currency? To evade economic sanctions. Shipping companies are obliged not to trade with sanction-hit countries such as Sudan, Yemen, and Qatar. Bitcoin provides a means of ensuring payment whilst enabling shippers to continue trading with these nations.
Also read: How to Protect Your Bitcoin and Your Privacy When Passing Through Customs
Shipped on the Blockchain
Bitcoin’s real-world use cases are often regarded from a consumer perspective. Increasingly, however, the digital currency is proving its worth not with P2P but B2B. Odessa-based Varamar Ltd, a Ukrainian shipping operator, has turned to bitcoin as a global payment solution. Unbothered by borders, bitcoin can be sent and received anywhere, regardless of geopolitics.
Varamar’s founder Alexander Varvarenko toldBloomberg:
Paperwork for transactions is a complicated issue with banks, and bitcoin payments will help solve that by being faster. It could also help solve payment problems in countries like Pakistan, Russia, Sudan, Yemen, and Qatar, which have safe companies but are victims of sanctions being imposed against their governments.
Grey Areas and Murky Waters
High transaction fees and sporadic blockchain congestion are making bitcoin less suited for personal shopping. These issues are all but eliminated at enterprise level however, where bitcoin is a safer and faster alternative to traditional banking. One of the greatest risks shipping companies face is banks refusing to process payments from countries that have been blacklisted or from rogue states where the regulatory and financial environment is unclear.
Yemen: calm waters, but trouble lies beneath the surface.
If the Ukrainian company’s trial of bitcoin proves successful, it is likely that other firms will follow their example. Russian broker Interchart LLC are reportedly also looking at bitcoin as a means of circumventing banking restrictions. Ivan Vikoulov, managing partner at Quorum Capital who have been helping Interchart investigate bitcoin, said:
The industry has been under stress as majority of vessels are registered offshore and many vessel owners have banks in the Baltics, where there is a squeeze to send and receive payments in dollars.
Shipping companies often have little choice who they work with due to the global nature of the industry. Given the political pressure companies face not to conduct business with sanctioned states, it is likely that some firms will keep their bitcoin involvement discreet.
Fly With Bitcoin, Live With Bitcoin
In the consumer sector, meanwhile, bitcoin can now be used to pay rent and charter flights. U.S. firmRentalutionsallows tenants to pay their rent in bitcoin, with the landlord receiving their dues in fiat currency through Coinbase.
Bitcoin whales whose cryptocurrency is burning a hole in their hot wallet may also be interested in Surf Air. “The future of travel meets the future of money” proclaims thecharter flight company, which now accepts bitcoin and ethereum. For around 6.5 BTC a year, customers can enjoy unlimited global flights, or unlimited U.S. flights for approximately half that figure. From the high seas to the high skies, bitcoin is certainly proving its uses.
Do you think companies should be using bitcoin to evade sanctions? Let us know in the comments section below.
Images courtesy of Shutterstock, and Surf Air.
Need to calculate your bitcoin holdings? Check our tools section.