While regulators and politicians work to prohibit sanctioned individuals from using cryptocurrency, Bitcoin alternatives face no opposition.
The potential use of bitcoin’s and cryptocurrency by Russia and its citizens to circumvent sanctions imposed by the US and other countries has sparked contrasting reactions.
While some believe it is impossible for Russia to use bitcoin to circumvent banking constraints, others worry that this potential might jeopardize Western efforts to stop the Russian army by damaging its economy.
Bitcoin is too small to replace the dollar and the euro as a trade currency.
Despite being a viable alternative for Russian citizens who may soon be unable to send and receive money freely due to capital controls imposed by their own country to mitigate the impact of foreign sanctions, Bitcoin is unlikely to help the Eastern European country and its oligarchs evade Western restrictions, according to the Bitcoin Policy Institute (BPI).
In a blog post, BPI stated, “Bitcoin’s is now much too small to replace the dollar and the euro as a trade currency.” “Russia’s annual (pre-war exports amount over $400 billion, roughly half the current market valuation of Bitcoin.”
International regulators and politicians, including US congressmen and the German Finance Minister, have expressed worries about individuals and countries using Bitcoin and cryptocurrencies to dodge sanctions.
Given the peer-to-peer nature of Bitcoin’s network, any punishments are unlikely to harm users who use it to transfer, receive, and hold currency because enforcing such limitations would be nearly impossible.
Regulators may use court orders to try to inadvertently freeze bitcoin funds held at certain Bitcoin’s addresses as Canada did, but without the correct tools, such efforts would be futile.
Custodial services like exchanges, which must typically obey the legislation, might be exploited by Western governments to tighten down on individuals using Bitcoin – though some have ruled out unilaterally blocking accounts.
But that’s only scratching the surface, as Bitcoin has a strong peer-to-peer ethos and a wide range of applications for anyone looking to use unstoppable money. Other cryptocurrencies, on the other hand, are not in the same boat.