It’s pretty clear that in Russia, a country that, according to Chainalysis’s 2021 Global Cryptocurrency Adoption Index, ranks 18th in the world for cryptocurrency adoption, the people are using digital currencies to try to get around harsh penalties that block normal financial activities.
Sanctions boost the use of cryptocurrencies in Russia
According to data recently published by the company Kaikotrades between the ruble and Bitcoin have skyrocketed since Russia decided to invade Ukraine. On certain P2P platforms, it seems that some Russians are buying Bitcoin for up to $64,000almost 50% more than its current price.
The harsh penalties that the international community is foisting on Russia for its attack on Ukraine is making life very difficult for many Russians, who find it very difficult even to get money out of ATMs.
The ruble is down 27% against the dollar since the beginning of the year and is trading at more than 100 rubles per US unit, the lowest level on record.
Crypto adoption in Russia increased after sanctions in 2014
According to many observers, the expansion of cryptocurrencies in the country began in 2014, The year in which the first sanctions were imposed on Russia, which, according to some figures, cost the economy of the Soviet country up to 50,000 million dollars a year.
That is why the new harsh sanctions will only increase the use of crypto assets that, being decentralized, clearly cannot be controlled by any external authority.
Ukraine would like to block cryptocurrency exchanges in Russia
Ukraine calls for the blocking of exchanges for Russian citizens
Ukrainian Deputy Prime Minister Mykhailo Fedorovwho is also the country’s Minister of Digital Transformation, has asked in recent days on Twitter that the cryptocurrency platforms block Russian accountsprecisely to avoid circumventing the financial and economic sanctions imposed on Russia.
At the same time, the Ukrainian minister himself has asked for and obtained large amounts of donations in cryptocurrencies in recent days, he wrote on his Twitter profile.
The use of cryptocurrencies to circumvent sanctions
On the other hand, the use of cryptocurrencies to circumvent sanctions it has already been successfully tested for years by both North Korea and Iran, two nations that have long been hit by harsh economic sanctions from the international community.
North Korea has made billions of dollars worth of crypto from cyberattacks, while Iran has used cheap energy to mine Bitcoin, according to Caroline Malcolm of analytics firm Chainalysis.
Digital ruble and digital yuan
The Russian government could also speed up the process of its digital ruble, which the Russian central bank estimated would see the light of day at the end of 2022, after the tests were completed in December last year. The digital ruble, according to the bank itself last year, would that the country was much less dependent on the US dollar for your international transactions.
Since China is also ready to launch its own digital currency, the two countries, whose trade relations are clearly intensifying these days, could establish a parallel crypto payment system.