Sending money between U.S.A. and Russia these days ...

[Chris Parker 11]

As we all know, the banks and transfer networks have all boycotted Russia because of the Ukrainian war.  I realize this is intended to isolate the country and prevent foreign investment, etc., but it also causes a lot of practical problems for ordinary people like us with just a personal relationship connecting us to the country.

 

How are people actually working around this problem?  Looking for a solution, the only two ways that I see is either by having a bank account in a third country that can still transfer with Russia (ex: FSU satellite countries), or the more risky hawala system of personal exchanges (net transfer of $0).  Both approaches require knowledge on the ground and connections...

Edited September 13, 2023 by Chris Parker

[BenNomad 88]

From first hand experience, transferring USD via Kazakhstan or Uzbekistan works, but it's up to the receiver to open an account there.

Raiffeisen and UniCredit banks still operate in Russia and you can send Euros without huge fees, only I'm not sure such transfers are allowed from the U.S. 

 

Another method people are using is sending crypto, but I haven't tried it myself. 

 

[millefleur 5,046]

2 hours ago, BenNomad said:

Another method people are using is sending crypto, but I haven't tried it myself. 

I have heard that crypto works but I also don't have firsthand experience.

[mendeleev 68]

Wire transfers can work.  Raiffeisenbank's parent bank in Austria has been under pressure by the US government and, as a consequence, now charges a prohibitive 50% commission for dollar transfers.   So our son opened a euro account at Raiffeisenbank and we now transfer euros.  Our brokerage firm (can I admit it is Schwab without violating TOS?) does the currency conversion for us.  There are extra steps.  Expobank is a Russian regional bank that allows dollar wire transfers.  We also have an account there and transfers dollars to it.  Fees on the Russian side at both banks are minimal.  (They are lower than ATM fees charged by US banks to let us take rubles from Russian ATMs were in the "good old days".  Schwab has a $15 wire transfer fee. ) These banks are under continual formal and informal pressure from western governments to stop providing service to customers and the situation changes from time to time.

 

Now, many US banks refuse to send wires to Russia.  I have heard (don't know if it is really true it since I don't have accounts there) that Bank of America and Wells Fargo refuse to wire customer funds to Russia.  Fidelity wouldn't tell me if they would or if they wouldn't.  I don't need Fidelity to do this right now, so didn't push the issue.  Like I wrote, things change.

[Chris Parker 11]

2 hours ago, mendeleev said:

Wire transfers can work. ... Our brokerage firm does the currency conversion for us.  There are extra steps.  Expobank is a Russian regional bank that allows dollar wire transfers.  ... Like I wrote, things change.

 

What I'm finding is the West's approach of financially isolating Russia by blocking these services is really pitifully if you look at it from the ground in Russia.  Wouldn't it be a joke if a major political power like the European Union or something listed one or more of the big banks in the U.S. like Bank of America, Chase, Wells Fargo, and Citibank on a sanctions list?  You really think that stain would impact the operations of these banks and stop people from using them?  It's just not right to hold such huge organizations as somehow directly responsible for financing a holy war or something like that, but rather it serves mostly as a political show for their constituents.  The policy is hypocritical and should have been done differently.

 

Russia, in particular, seems to be a country where many people don't even have a bank account, and there is almost no such thing as a "pre-authorized electronic transfer."  The closest thing to that is the use of credit/debit cards, as those are used primarily like checks are in the U.S. to transfer money between accounts at banks, not to pay for purchases at retail locations.  It may be different in the major metropolitan areas like Moscow and St. Petersburg, but what I'm finding is Peer-to-Peer (P2P) exchange systems are growing in use in Russia because they fit in socially and culturally with the people and history of the country, and they also work well in the current financial environment within the country itself as well as on cross-border transactions.

 

So the ultimate outcome of the Russian bank sanctions and boycott may be that the Western banks are shooting themselves in the foot.  Many people on both sides are discovering that they don't need the expensive money transfer networks of the banks, which aren't even always reliable or dependable, because money movement on the bank systems is too often subject to lengthy holds and delays for suspected fraud or money laundering or other excuses.  People today can actually use the Internet as an open financial network with P2P exchanges to achieve the same functionality, and in this context, it is the banks which are looking increasingly backwards and outdated, unable to verify, complete, and finalize transactions in a timely and accurate way.

 

Edited November 19, 2023 by Chris Parker

[ah-no 27]

I used crypto in the very very early days. It was quick, and easy, but with massive fees.

[BenNomad 88]

On 11/19/2023 at 3:57 PM, mendeleev said:

Now, many US banks refuse to send wires to Russia.  I have heard (don't know if it is really true it since I don't have accounts there) that Bank of America and Wells Fargo refuse to wire customer funds to Russia.

I was able to transfer euros from Chase Bank to a Raiffeisen Russia account. The currency gets converted twice, USD->EUR->RUB so it's not great, but it works.

[spysee 6]

Buy USDC on US Coinbase exchange with your bank account (0% commission).

Your significant other in Russia needs to create account on one of the international crypto exchanges (Binance, ByBit, Huobi, etc - takes 5 mins)

Send USDC to their Binance, ByBit or Huobi account (0% commission if sending through Solana network on Coinbase)

They receive it in 5 mins and then they withdraw it to their Russian bank card through P2P with the exchange rate better than the official rate.

All together - absolutely free transfer and the best USD-RUB rate.

Edited November 21, 2023 by spysee

[Chris Parker 11]

1 hour ago, spysee said:

Buy USDC on US Coinbase exchange with your bank account (0% commission).

I'd suggest Dai (DAI) currency instead of Tether (USDT) or USDC if you want to use a token that's pegged to the dollar.  It's the least expensive in terms of fees.  If you don't care about dollar value, BCH (Bitcoin Cash) or LTC (Litecoin) are other options with low transaction fees designed for quick exchange rather than long-term holding.  But be careful that the network used on both ends matches before transferring to another service!

 

1 hour ago, spysee said:

Your significant other in Russia needs to create account on one of the international crypto exchanges (Binance, ByBit, Huobi, etc - takes 5 mins)

Most (or maybe all) of these international exchanges dropped RUB (ruble) as a fiat currency this summer and will not directly process Russian credit cards.  Binance, in particular, has pulled out but also set up a totally different exchange they call "CommEx" for use exclusively in Russia with the ruble currency (it's much more limited in terms of currencies and networks, and it relies almost entirely on P2P listings to get rubles in & out of the exchange).  A better suggestion we're about to try is Garantex (garantex.org), which is now based in Moscow and operating only in Russia due to international sanctions.

 

1 hour ago, spysee said:

They receive it in 5 mins and then they withdraw it to their Russian bank card through P2P with the exchange rate better than the official rate.

All together - absolutely free transfer and the best USD-RUB rate.

Don't expect U.S authorities to have anything nice to say about Garantex or Sberbank or using P2P or cryptocurrency in general.  Cryptocurrency is enabling not only bypass of the Russia sanctions but also international fraud, theft, and money laundering.  However, this really isn't the fault of the blacklisted exchange or Russian banks.  Rather it is the government's own fault for refusing to accept that cryptocurrency is foreign money and needs to be regulated as such.  It's also hypocritical, as there's plenty of cryptocurrency fraud available even in the U.S.  For example, Paxful (paxful.com) which is a P2P cryptocurrency exchange based on the U.S. whose user base seems to be like 99% scammers on both the buyer and seller sides (targeting especially new users, or constantly stealing from each other I guess), so be careful using any P2P and always stick with small amounts!

 

Edited November 21, 2023 by Chris Parker

[zimothy 2]

I'd be interested to know what works for you, because I also have the same question. I need to send about $350 a month to my wife in Russia. I've never done anything with crypto before, so I'm a little bit nervous to try it. 

[Chris Parker 11]

59 minutes ago, zimothy said:

I need to send about $350 a month to my wife in Russia. I've never done anything with crypto before, so I'm a little bit nervous to try it. 

The concept of a P2P, which I discussed earlier before crypto came up, goes like this:

 

1) I need to transfer, for example, $150 from Russia to USA.

2) You need to transfer $350 as mentioned about from USA to Russia.

 

Now, if we can trust each other, you see how we could help each other accomplish our goal by just making local transfers between each other rather than any international wires! 

 

However, it's not a complete solution, because there is an imbalance in our amounts, and you'd need somebody else also to get your remaining $200 exchanged. 

 

Of course, dealing with strangers like this who have no reason to trust each other, save the common need for repeat business, usually there needs to be some kind of broker, middleman, security deposit, etc. to provide a means for recourse or chargeback in case either of the parties defaults.  

 

What I've just described is what a P2P exchange is supposed to do: match the parties, facilitate the trade, and provide some means of security.  It's all based on an concept called, "Bills of Exchange" which pre-dated modern era bank checks usage.

Edited November 21, 2023 by Chris Parker

[spysee 6]

14 hours ago, Chris Parker said:

I'd suggest Dai (DAI) currency instead of Tether (USDT) or USDC if you want to use a token that's pegged to the dollar.  It's the least expensive in terms of fees.  If you don't care about dollar value, BCH (Bitcoin Cash) or LTC (Litecoin) are other options with low transaction fees designed for quick exchange rather than long-term holding.  But be careful that the network used on both ends matches before transferring to another service!

 

Yes, why not, you can buy anything - DAI, USDT, BTC, SOL, etc but if you don't want to pay ANY fees then the only coin you can buy with absolutely ZERO fees in US is USDC stablecoin on Coinbase. If you want to buy DAI - Coinbase will charge you 3% commission.

 

14 hours ago, Chris Parker said:

Most (or maybe all) of these international exchanges dropped RUB (ruble) as a fiat currency this summer and will not directly process Russian credit cards.  Binance, in particular, has pulled out but also set up a totally different exchange they call "CommEx" for use exclusively in Russia with the ruble currency (it's much more limited in terms of currencies and networks, and it relies almost entirely on P2P listings to get rubles in & out of the exchange).  A better suggestion we're about to try is Garantex (garantex.org), which is now based in Moscow and operating only in Russia due to international sanctions.

 

 

Not exactly true. Most largest international crypto exchanges still have RUB and both biggest Russian banks that are sanctioned (Sber and TInkoff) as official methods for P2P deposits and withdrawals. And I don't think they ever completely close the door for RUB to be withdrawn. Especially Bybit (UAE) and Huobi (China). You can actually still withdraw RUB on Binance too, no problem (Tinkoff is now Reiffeissen there and Sber is Rosbank :).

 

Pretty much like Dobryi Cola or Lubimaya Cola in Russia. Officially Coca Cola and Pepsi left but in fact they just renamed their products and keep making money like before. 

 

[BenNomad 88]

The only exchange operating in Russia that supports USDC for P2P transactions seems to be ByBit. Am I missing something? I registered on HTX (Huobi) - no USDC listed for P2P. Same thing with CommEx. I couldn't find USDC on Garantex either. USDT seems to be widely supported though.

 

Also, the only mutually available network for transferring USDC to ByBit or HTX is Ethereum. Solana network is not available. As far as I could tell, there is no zero-fee transfer option for USDC, but the fee using the Ethereum network at the time I checked was around $5. And that's a flat fee, not a percent of the transfer amount. 

 

 

[Chris Parker 11]

See attached trading screenshot from Garantex:

 

 

As you can see, they definitely seem to support USDC, and they even say so on their main home page before login or registration.

 

Also, Coinbase is not the only U.S. cryto exchange with low-cost or free redemption of USDC.  Gemini's fee schedule for Stablecoin (ActiveTrader UI mode only) provides 0.01% Taker Fee and 0.00% Maker fee for the USDT/USD, USDC/USD, and DAI/USD pairs.  Note that USDT is currently not allowed in NY.

 

[BenNomad 88]

3 hours ago, Chris Parker said:

See attached trading screenshot from Garantex:

 

 

As you can see, they definitely seem to support USDC, and they even say so on their main home page before login or registration.

 

Also, Coinbase is not the only U.S. cryto exchange with low-cost or free redemption of USDC.  Gemini's fee schedule for Stablecoin (ActiveTrader UI mode only) provides 0.01% Taker Fee and 0.00% Maker fee for the USDT/USD, USDC/USD, and DAI/USD pairs.  Note that USDT is currently not allowed in NY.

 

Oh, ok. Thanks. I was looking only at P2P. I thought P2P was the only way to withdraw to a Russian bank account. 

I sent a small amount of USDC to a new account I opened on ByBIt and it just vanished! It was sent succesfully but it never arrived.