Due to the ongoing war between Russia and Ukraine, Ukraine recently called for “sabotage of everyday Russians’ cryptocurrency assets.” Many of its European allies are also concerned that Russia might use crypto to circumvent Western sanctions.
Ironically, the Central Bank of Russia (or CBR) is the biggest proponent of preventing everyday Russians from having access to cryptocurrencies. According to local news outlet, tass.ru, the CBR is still sticking to its proposal to ban the mining, issuance and circulation of cryptocurrency in the Russian Federation. CBR officials stated:
“The Central Bank supports the position that was previously published and announced on the official website. There is nothing more to be said today.
In order to finance military operations, countries often have to increase their spending during wartime. This can lead to inflation and encourage people to convert their local currency for foreign currencies (including crypto) to protect their savings.
This would put a lot of selling pressure on the local currency, which could lead to higher exchange rates and impede war financing efforts. Countries often impose strict foreign exchange controls in wartimes. This is what Russia and Ukraine have done. The potential drawbacks of crypto destabilizing Russia’s Ruble and, indirectly, crippling Russia’s war efforts could outweigh any benefits of using crypto for evading sanctions.
Arcane Research published this week a report that showed daily Tether (USDT), to ruble trading volume on Binance hit a record of $35 million. Russian social media users seem to be very concerned about the declining value of the ruble. They also want to know how cryptocurrencies could help them save their money. User Roman Buchyn wrote:
“You must buy something [cryptocurrencies]; soon, the ruble will be less expensive than toilet paper.”