As geopolitical risk linked to Iran grows, some commodity traders are being pushed out of bank payment networks, and reliance on stablecoins is rising as an alternative.

On April 12, blockchain outlet CoinDesk reported that Western banks are stepping back from certain commodity trades over concerns about potential links to sanctions, with dollar-pegged stablecoins filling the gap.

The shift was detailed through remarks by Luke Sully of Haycen, an issuer of a trade finance-focused stablecoin. Sully said banks’ compliance burdens have increased since the war related to Iran, leading to a new phenomenon of “debanking” in commodity markets. He said of some traders, “bank transactions are currently being cut off.”

The core issue is counterparty risk. Banks are concerned that even trades that appear legal, such as deals with hub companies in the Middle East including Oman, could be indirectly connected to Iran-related entities under sanctions. As banks choose to withdraw from transactions rather than take risks, access to existing bank payment networks is falling further.

The impact is being felt more sharply in trade finance, where non-bank players already account for a large share. In the trade finance market, estimated at about $2 trillion, non-bank lenders such as private credit funds already supply funding. They have still relied on banking networks at the final settlement stage, but that link has recently weakened as well, lifting stablecoins as an alternative.

Use of Tether’s USDT is rising quickly. Sully said, “Tether is absorbing a substantial part of settlement flows,” and added that its usefulness as a one-off payment method is increasing in emerging market trades. Global liquidity, broad acceptance and a structure that allows conversion into dollars in various countries are cited as drivers of the spread.

The stablecoin market itself is also growing rapidly. Total market capitalisation exceeded $300 billion in 2025, while transaction volume topped $4 trillion and accounted for about 30 percent of on-chain activity. It was previously seen as a tool for cryptocurrency trading, but its use is expanding into the real economy, including remittances and trade settlement.

Some also draw a line at describing the current trend as a fundamental solution for trade finance. Sully said, “This is only a kind of workaround, not a solution for trade finance as a whole,” stressing that stablecoins have not fully replaced existing financial infrastructure.

Against this backdrop, Haycen is moving to target the market with its dollar-pegged stablecoin for trade finance, USDhn. The company aims to build liquidity and settlement infrastructure for global trade based on non-bank players. Users deposit funds, trade using stablecoins and can receive interest depending on regulatory requirements.

The market is also watching the possibility that banks’ retreat could accelerate cryptocurrency adoption. Sully cited reports that bitcoin is being used for payments linked to passage through the Strait of Hormuz, and said trade finance is increasingly being run by non-bank players and non-bank-style transaction methods. Ultimately, the longer geopolitical instability persists, the more demand for stablecoin-based settlement could rise in on-the-ground commodity trading.