Introduction: When Fintech meets Hard Commodities
Metals trading is one of the most conservative segments of the global economy. The classic set includes bank payments, letters of credit, factoring, currency control, complex KYC/AML and multi—level documents on Incoterms and cargo insurance. Against this background, crypto payments, and especially bitcoin, have long seemed like an alien exotic. However, in 2024-2025, the trajectory changed: mature providers, legal certainty in a number of jurisdictions, autoconversion tools and "price protection" made bitcoin payments the subject of pragmatic pilots among metal traders and processors. The question already sounds different: not "why", but "when and how".
Why do metals need "crypto"? Pragmatic motives
- Speed and predictability: international payments in BTC are performed 24/7 and do not depend on banking windows. This reduces the capital turnover time and the risk of payments getting stuck.
- Reduction of transaction costs: for large amounts, the fees of providers with auto-conversion are often lower than the total costs of correspondent transfers and confirmations.
- Diversification of payment rails: an alternative channel in case of sanctions or operational stress in the banking infrastructure.
- New markets: the opportunity to work with clients in developing countries, where bank settlements are difficult and expensive.
How to make friends with volatility and metals: pricing models
The main argument against crypto payments is the volatility of the exchange rate. In metals, prices are linked to exchange benchmarks (LME, COMEX) and premiums/discounts for quality and logistics. The solution is to separate the product price and the payment channel.:
- Price in fiat, payment in BTC: the contract is fixed in USD/EUR at LME/COMEX + premium; payment is in BTC with instant auto—conversion from the provider. The price of the product does not change due to the crypto market.
- The window of fixation ("price‑protection"): the BTC amount on the invoice is determined by the agreed index for 10-30 minutes; then recalculation. This minimizes the price risk.
- Hedging: with significant prepayments, the buyer can temporarily hedge the position with derivatives, synchronizing the hedge with the payment window.
It is convenient to keep a parallel benchmark inside the operational dashboard (for example, "bitcoin exchange rate to the dollar") — this is how accounting and risk management compare BTC equivalents with the dollar value of a batch.
From Letter of Credit to Crypto Escrow: how to secure the delivery
A classic letter of credit solves the problem of "who comes first — money or goods". There are several analogues available in the crypto environment:
- Bank escrow + auto-conversion: the buyer pays BTC to the provider, who converts it into fiat and deposits it on
