Following the Russian attack on Ukraine, the latter has been continuously calling for “sabotage” of everyday Russians’ crypto assets. The European allies of Ukraine have also supported the request by raising concerns that Russia could use crypto to evade Western sanctions.
Interestingly, it appears that the Central Bank of Russia, or CBR, is one of the strongest proponents of blocking ordinary Russians and financial institutions from accessing crypto. According to local news outlet tass.ru, the CBR is sticking to its position of proposing a ban on cryptocurrency issuance, mining, and circulation in the Russian Federation.
Governments often need to drastically increase their expenses during times of war, such as by printing additional money to fund their military operations.
As a result of this, individuals are enticed to convert their native currencies for foreign currencies (including, now, crypto) in order to secure their wealth. In addition, they are also worried about getting their funds seized if the sanctions go too far.
Russia faces declining Ruble value
However, the situation puts heavy selling pressure on the local currency, causing exchange rates to rise and hampering war-funding efforts. As a result, countries often impose stringent foreign exchange controls during times of war, as Russia and Ukraine have already done. As a result, the risks of crypto weakening the Ruble and, by extension, crippling Russia’s war operations may outweigh the advantages of utilizing crypto to avoid sanctions.
The daily Tether (USDT) to ruble trade volume on Binance reached an all-time high of $35 million, according to a research published this week by Arcane Research. Members of the Russian social media community appear to be worried about the Ruble’s declining value and how crypto can help them secure their savings.
The effect on the common people of Russia has been devastating due to actions by its government. Crypto community talked about the war on Twitter, expressing their concerns over the situation and how citizens of both the countries are suffering during these times.