The Biden administration has been talking to crypto exchanges, asking them to prevent Russian users from using their platforms as a way to avoid sanctions. Some crypto entities have limited or blocked usage in Russia, though others have not.
The Biden administration is reportedly asking crypto exchanges to ensure that sanctioned Russians do not use crypto to avoid sanctions, according to a Bloomberg report published on March 1. Representatives from the Treasury Department and White House said that they had asked crypto exchanges to prevent the use of digital assets to skirt around sanctions. Ukrainian Vice Prime Minister Mykhailo Fedorov has also asked crypto exchanges not to serve Russians.
So far, some crypto entities have complied with the decision by many countries to exclude Russia from the global economy for its acts of aggression against Ukraine. Binance has said that it will not serve those on the sanction list, though it will not impose a blanket block on all Russian citizens.
Russian crypto exchange activity has spiked sharply following the announcement of sanctions on Russia, including the ejection of Russian banks from the SWIFT network. Citizens are looking for ways to secure their financial freedom. There have been multiple videos showing long lines at ATMs, as citizens seek to hold cash.
The sanctions have had a devastating effect on the Russian, even in the first few days after. The Russian Rouble is now worth less than a cent, and with interest rates being set at 20%, Russia is in for heavy inflation in the months to come. The Moscow Stock Exchange has also been closed until Mar. 5, which is unlikely to help as Russia’s economy implodes.
Crypto seen as a way to bypass sanctions
Russian citizens are already taking to crypto exchanges to escape the sanctions and secure some of their finances. North Korea, for example, has long been using crypto to bypass the economic sanctions imposed on it. And the crypto community, while speaking out against Russian aggression, also opposed the request to freeze Russian crypto accounts.
However, there are those who do not see Russia switching to crypto in the months to come. And with more crypto entities limiting usage in Russia, it’s certainly becoming less likely to happen.
In any case, it’s proven that individuals and groups are willing to turn to crypto in times of economic hardship. This was also the case during the trucker protest in Canada.
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