The US dollar-pegged stablecoin Tether, (USDT), saw a surge of more than 30% against the Russian ruble in just five days — clearly demonstrating the immediate and negative impact of the ongoing war on traditional financial systems.
Cointelegraph Markets Pro data and Binance crypto exchange show that the ruble is experiencing inflation as the USDT/RUB trading pairs — for the first-time in history — crosses 105 rubles.
USDT/RUB price performance. Source: TradingView
The USDT/RUB exchange rate maintained a relatively stable market price of less than 80 rubles prior to the spike. The ruble’s price against USDT jumped on Thursday due to the Russia-Ukraine conflict. It briefly surpassed 90 rubles.
Tensions were increasing when the European Commission announced plans on Sunday to remove Russian banks and other financial institutions from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) messaging system.
We will also paralyse Russia’s central banks assets. It will also freeze all transactions. It will also make it difficult for the Central Bank’s to liquidate its assets. pic.twitter.com/8H9eWkNCW9
— Ursula von der Leyen (@vonderleyen) February 26, 2022
Parallel to this, the ruble’s value declined and continues to lose its purchasing power by 30%. Inflation has also affected it.
The Russian central bank increased its key interest rates from 9.5% to 20% Monday as an immediate response to rising inflation in its fiat currency. According to the central bank
“The key rate will be increased to ensure that deposit rates rise to the levels necessary to offset inflation and depreciation risks. This is necessary to maintain financial stability and protect savings against depreciation.
The government also demanded that Russian companies sell 80% of their foreign currencies revenues to avoid a total international financial ban.
RelatedUkraine Bitcoin exchange volume spikes 200% as Russia war sparks currency concerns
On the other hand, Bitcoin (BTC), and altcoin trading volumes have risen more than 200% on Ukrainian crypto-exchanges amid growing concerns about its fiat stability.
Cointelegraph reported that Kuna, the largest crypto exchange, saw its volumes rise to nearly $4.1 million in just three days. The National Bank of Ukraine also implemented cash restrictions. They have set withdrawal limits and outlawed cross-border currency purchases and withdrawals.