As a result of sanctions, Russia is largely cut off from the US dollar-based global financial system. As a result, some policymakers and money-laundering experts have warned that cryptocurrencies could provide a hidden route for wealth preservation
“Cryptocurrencies threaten to weaken sanctions against Russia, allowing Putin and his cronies to evade economic pain,” US Senator Elizabeth Warren said, urging US regulators to intervene. Since the invasion began, Ukraine’s deputy prime minister, Mykhailo Fedorov, has frequently urged crypto exchanges to prohibit Russian users.
Trading between the Russian ruble and a variety of digital assets, such as bitcoin, has more than doubled in recent days. CryptoCompare recorded a threefold rise in ruble-crypto trading volumes compared to a week ago, with 15.3 billion rubles ($140.7 million, €128 billion) traded.
The United States Puts Sanctions On Russia After Ukraine
Following Russia’s invasion of Crimea in 2014, the United States banned Americans from doing business with Russian banks, oil and gas developers, and other companies. The impact on Russia’s economy was immediate and significant. According to economists, sanctions implemented by Western countries cost Russia $50 billion every year.
The global market for cryptocurrencies and other digital assets has grown dramatically since then. That’s bad news for sanctions enforcement, but good news for Russia.
The Biden administration imposed new sanctions on Russia on Tuesday in response to the turmoil in Ukraine, aimed at limiting the country’s access to foreign finance. Experts say Russian firms are planning to mitigate some of the worst effects by striking arrangements with anyone willing to work with them wherever in the world.
They claim that these entities can then employ digital currencies to circumvent government control points, such as bank transfers, to prevent contract implementation.
Conclusion
However, even with the concerns of Janet Yellen and Hillary Clinton, there isn’t enough cryptocurrency on the earth to bail out Russia from the financial hole it has found itself in. Even if there was a large enough supply, it would almost certainly not be enough to allow the state to escape the scourge of a Western embargo.
“It’s important to note that even where nefarious actors try to use crypto, legislation enforcement can hint this exercise due to its transparency, and crypto companies can use options like blockchain analytics to adjust to sanctions requirements,” David Carlisle, director of policy and regulatory affairs at Elliptic, told Cointelegraph.
Read More: Is Crypto a Miracle or Scam?
