As cryptocurrencies gain momentum in Russia and Ukraine, the Central Bank of Russia has reiterated that citizens shouldn’t have anything to do with digital assets. This opinion comes as a contrast to the West fearing that the Kremlin would use crypto to bypass the escalating economic sanctions.
Some experts said the crypto markets could help fuel the war of aggression or help Russian oligarchs preserve their wealth. Michael Fasanello, the director of training and regulatory affairs at Blockchain Intelligence Group, had earlier stated that crypto will be front and center for use by both Russia and Ukraine in the conflict. He highlighted that access to crypto could somewhat soften the sanctions on Russia as the Russians would lean on digital assets.
Various financial institutions across the world and NATO allies have placed economic sanctions on Russia. The European Union and the US took a harsh approach by banning Russia from SWIFT. Analysts believe the Russians would see their assets and savings lose in value.
As such, the cryptocurrency market looks very attractive. It is seen as an open door for ordinary Russians to access foreign exchange through bitcoin or stable coins pegged on the US dollar, such as US Tether (USDT). But the irony is that the Central Bank of Russia is preventing Russians and financial institutions from accessing digital assets.
Russia’s central bank maintains its position of calling for a ban on crypto mining, issuance, and circulation of cryptocurrencies in the country. But now the war with Ukraine has countries concerned that the Kremlin could turn to cryptos as financial sanctions do not cover cryptocurrencies.