Investors in Russia still seem able to conduct transactions in cryptocurrencies, despite the tightening economic sanctions being placed on the country.
Last week, ruble-denominated Bitcoin trading volume rose to its highest level yet this year, according to data from blockchain analytics firm Kaiko. However, overall flows still appear to be relatively small at just $14.2 million, compared to Bitcoin’s average daily trading volume of $20-40 billion. Kaiko also reported that higher growth by “magnitude” occurred for ruble denominated Bitcoin trading pairs on March 5.
Meanwhile, the day Russia invaded Ukraine on Feb. 24, the average trade size of Bitcoin ruble transactions on Binance hit a 10-month high of roughly $580. Notably, most of the ruble-denominated crypto trading volume seems to be going through the Tether stablecoin.
“Perhaps more Russian retail investors are looking to get out of fiat exposure altogether in favor of BTC,” said crypto algorithmic trading firm Efficient Frontier business development manager Andrew Tu. “While technically, U.S. dollar sanctions probably cannot be realistically applied to USDT holders, I imagine that some people are simply taking additional precautions.”
Binance ban ‘unethical’
According to blockchain analytics firm’s newsletter only three global crypto exchanges offer ruble-denominated crypto trading pairs, Binance, Yobit, and LocalBitcoins. For this reason, many who have called for crypto exchanges to ban Russian users in light of the country’s invasion of Ukraine hope Binance would comply.
Yet Binance and American rival crypto exchange Coinbase refuse to issue a blanket ban against Russians, but insist they comply with restricting those who are sanctioned. Binance CEO Changpeng Zhao called such a blanket ban “unethical,” while Coinbase CEO Brian Armstrong acknowledged that cryptocurrencies act as a “lifeline” to many “ordinary Russians” at the moment.
Indeed much of the trading volume associated with Russia appears to be individuals stocking up, according to Australian crypto exchange BTC Markets CEO Caroline Bowler. “This uptake in Bitcoin in particular relates to retail, who are out there aggressively buying in small amounts,” she said. While these platforms may meet the needs of retail traders, they currently lack the capacity to facilitate needs on a scale the size of the Russian Federation.
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