Data from blockchain analysis firms show that Russia’s cryptocurrency-denominated cryptocurrencies have faltered, dispelling theories that the country will turn to digital assets to circumvent sanctions.
When bitcoin rose more than 15 percent last week, some industry experts attributed the jump to Russians buying cryptocurrencies in the face of growing economic sanctions. However, this theory seems to be incorrect, as Chainalysis data show that the volume of cryptocurrency trading in rubles was only $ 34.1 million on March 3, about half of the recent peak of $ 70.7 million a week ago. February 24.
Speaking about the purchase of cryptocurrency, fueled by sanctions against Bloomberg, Citigroup analyst Alexander Saunders said: “Russia’s volumes so far have been relatively small, which suggests that the price action is due more to investors of demand from Russia, rather than the Russian requirement itself. “
Although experts reject the idea that cryptocurrency can be used to help Russia circumvent economic sanctions, the United States and the EU are still tightening their regulatory control over digital assets.
The state of New York recently increased its blockchain surveillance capacity to prevent further use of cryptocurrencies or digital assets in support of Russian interests.
New York Governor Katie Hochul issued an executive order on February 27th ordering government agencies to give up Russian institutions and companies, as well as entities that support them. She said:
“New York is the proud home of the nation’s largest Ukrainian population, and we will use our technological assets to protect our people and show Russia that we will hold them accountable.
Emphasizing the other side of the story, Jake Cervinski, head of policy at the Blockchain Association in the United States, went so far as to call these fears about crypto “completely unfounded.”
1 / Russia cannot and will not use cryptocurrency to avoid sanctions.
Concerns about the use of cryptocurrencies to avoid sanctions are completely unfounded. They are fundamentally misunderstood:
– how sanctions work
– how crypto markets work
– how Putin is actually trying to ease sanctionsI will explain
– Jake Chervinsky (@jchervinsky) March 1, 2022
Ari Redboard, head of legal and government affairs at cryptocurrency researcher TRM Labs, said it was too late for cryptocurrencies to provide enough liquidity for Russia and that the public nature of blockchains was already a sufficient deterrent. for those who want to circumvent sanctions.
“Russia cannot use cryptocurrency to replace hundreds of billions of dollars that could be blocked or frozen.
Connected: The European Commission will remove Russian banks from the SWIFT cross-border network
In the face of impending regulatory action by the international community, many of the world’s leading cryptocurrencies have decided to blacklist sanctioned individuals and organizations. However, Binance denied requests to censor the accounts of “innocent” Russian customers.