The ripple effects of geopolitical conflict are reshaping the plumbing of global trade finance, pushing some commodity traders out of the banking system and into the arms of stablecoins.
That’s according to Luke Sully, CEO of trade finance-focused stablecoin issuer Haycen, who says the war involving Iran has heightened compliance fears among Western banks, triggering a fresh wave of “debanking” across commodity markets.
“Since the war, banks are further retreating from certain commodity flows,” Sully told CoinDesk in an interview.
“We spoke with some commodity traders who are getting debanked now,” he added.
The $2 trillion market
The concern centers on counterparty risk.
Banks worry that seemingly legitimate transactions, say, involving firms in Oman or other regional hubs, could have indirect exposure to sanctioned Iranian entities. Rather than take the risk, some institutions are stepping back entirely.
The result is reduced access to traditional rails in a sector that is already largely financed outside of traditional banking.
Trade finance, a roughly $2 trillion market for international trade transactions, has increasingly been dominated by non-bank lenders, including private credit funds that finance the movement of commodities and goods globally.
“Everybody thinks they know about trade finance, but they don’t,” Sully says. “It’s predominantly non-bank investment funds lending to borrowers around the world to move goods and services.”
These lenders provide critical liquidity, often earning annualized returns of around 15%, and enable transactions such as shipping helium from Qatar to South Korea or manganese from South Africa to Indonesia.
But they rely on banks for settlement and payment rails, relationships that are now under strain.
Stablecoins, digital tokens pegged to fiat currencies, typically the U.S. dollar, are emerging as a key workaround. In particular, Tether’s USDT has seen growing adoption among commodity traders and counterparties operating in emerging markets.
These cryptocurrencies have rapidly evolved from a niche crypto trading tool into one of the fastest-growing segments of global finance, with total market capitalization surpassing $300 billion in 2025 after roughly 50% annual growth.
Transaction volumes have surged even faster, exceeding $4 trillion in 2025 and now accounting for around 30% of all onchain activity, underscoring their growing role as a medium for cross-border payments and dollar access in emerging markets.
Tether’s dominance
Once primarily used within crypto markets, stablecoins are increasingly being adopted for real-world use cases, from remittances to trade settlement, driven by their speed, global liquidity and ability to bypass traditional banking rails.
One such stablecoin is Tether’s USDT, which is currently dominating the flow.
“Tether is soaking up a lot of the payments flow,” Sully says. “If you want to make a one-time payment into an emerging market, USDT is helping.”
The appeal is straightforward: deep global liquidity and widespread acceptance.
“There is so much global USDT liquidity that people don’t mind sending or accepting it as payment,” he added, “because someone in their country will eventually swap it for dollars.”
That growing familiarity is also shifting perceptions.
Still, Sully frames this trend as a workaround rather than a long-term solution. “This is more of a workaround for these people than a solution for trade finance in general.”
‘A different problem’
The geopolitical backdrop is also producing more extreme signals.
Sully pointed to reports that bitcoin
“It shows that trade finance is increasingly being led and managed by non-bank actors and non-bank ways of transacting,” Sully says.
Haycen is positioning itself to capture this shift. The firm issues a U.S. dollar-backed stablecoin, USDhn, designed specifically for trade finance.
According to Sully, “Haycen aims to be the liquidity and settlement layer for non-bank global trade and is currently working with industry participants around the world.” The goal is to streamline a highly fragmented system.
Haycen’s model allows users to deposit funds, transact using its stablecoin, and potentially earn interest, subject to regulatory eligibility, while avoiding the delays and inefficiencies of correspondent banking.
“Funds don’t get lost for seven days. You can log in, see your deposits and counterparties in one place, and settle instantly.”
Unlike most stablecoin issuers, which focus on crypto trading or retail payments, Haycen is targeting a specific institutional niche. “Every other stablecoin business is a payments business or a crypto trading business,” Sully says. “We’re solving a different problem.”
That problem, how to move money efficiently in a fragmented, increasingly de-risked global trade system, may only grow more acute as geopolitical tensions persist.
Ironically, Sully notes, banks’ retreat could accelerate crypto adoption faster than the industry itself ever managed.
Read more: Banks are treading carefully on stablecoins despite market growth, S&P Global says