- The Central Bank of Russia wants Russians to have nothing to do with crypto.
- Ruble-Denominated Bitcoin Volume hits 9-Month High.
- Major exchanges continue to resist pressure to block Russian users.
Russia’s apex bank maintains its stance and wants Russians to have nothing to do with crypto. The Central Bank of Russia (CBR) maintains this stance despite the present economic downturn.
The CBR’s Position Remains The Same
The ruble has been in a free fall since the start of the Ukrainian invasion and multiple reasons account for the decline. Self-imposed sanctions on the citizenry and multiple sanctions that have been placed on the energy giant by NATO and its allies. EU countries announced that several Russian Banks have been kicked out of SWIFT as part of sanctions in retaliation for the invasion.
As such, several Russians risk watching their assets and savings tank in value. For some, the crypto market can provide an opportunity to access foreign exchange in the form of stablecoins pegged to the dollar or perceived safe-haven assets like Bitcoin. Arcane Research at the beginning of the month revealed that the USDT and ruble trading pair reached a new trading volume ATH of $35 million, with a similar spike in the BTC and ruble pair.
This might be proof of Russians opting to hedge against the devaluation through crypto. However, there is another outcome from this: the selling pressure from this further drives down the value of the ruble, an outcome that every central bank tries to prevent for its currency. Given this, it is not so surprising that the CBR remains firmly opposed to crypto.
The head of the Department of Financial Technologies of the Bank of Russia, Maria Telegina, said, “The Central Bank currently supports the position that was previously announced and published on the official website.” She said this when asked about the apex bank’s stance on crypto considering the increasing sanctions and economic woes.
In January, the bank released a report titled “Cryptocurrencies: Trends, Risks, Measures.” In the aforementioned report, the bank outlined several concerns about cryptocurrencies and cryptocurrency mining, ranging from environmental harm to their use in money laundering. The CBR recommended that the asset class should be banned, as well as mining activities, invalidating concerns that the country will turn to cryptocurrencies to circumnavigate imposed sanctions.
Major Exchanges Refuse To Heed Ukraine’s Request
As the conflict in Eastern Europe continues, NATO and its allies have turned to sanctions in a bid to make Putin rethink his invasion. However, concerns have been raised that these financial sanctions have a major flaw: they do not cover cryptocurrencies.
There have been calls for the EU to speed up its creation of a regulatory framework for the asset class. Ukraine’s Vice Prime Minister, Mykhailo Fedorov, also took to Twitter to request that Russian crypto addresses be blocked by major crypto exchanges.
Exchanges such as Binance, Coinbase, and Kraken have revealed that they are unable to comply with such requests. Kraken CEO, Jesse Powell, added that Kraken could only do so if required by law, which he noted may actually be imminent.