How Russia Could Use Crypto To Evade International Sanctions
Following Russia's invasion of Ukraine, it faces a plethora of international sanctions. Cryptocurrency could provide a means of evading them. Read the full article by Scott Chipolina Neither this post nor any other on cryptofal.com should be taken as financial advice. It is not.
This has been a hard week for the markets as Russia took its invasion on Ukraine from talk to action. This even caused the Russian stock market to crash 30% and the Ruble to crash to the lowest it has ever been against the US dollar. Countries have been quick to respond with sanctions on Russia that will be mostly aimed at the Banks and other state-owned enterprises of the country.
Possibly the biggest sanction that could be levied on Russia would be removing them from the SWIFT banking system which the UK has demanded. At this point, it does not seem that they are going to be removed from SWIFT but if they were, Putin would have a way of avoiding these international sanctions. Taking Russia off of SWIFT would effect people around the world and especially a country like Germany who gets a lot of resources from Russia.
“As with the traditional financial system, Russia can leverage cryptocurrency to evade the sanctions that are being put in place in response to their invasion of Ukraine," Caroline Malcolm, Head of International Policy at blockchain analytics firm Chainalysis, told Decrypt. The only issue there is that using blockchain these transactions can be tracked and if the people running the platform can freeze transactions if they wish all that would need to be done is to identify the transaction.
President Biden made note of this in October and the Treasury Department said that these technologies also “empower our adversaries seeking to build new financial and payment systems intended to diminish the dollar’s global role.”
If Putin was to use Bitcoin or cryptocurrency to avoid sanctions that could be bad for the general perception of the technology. Doing this would make it highly politicized. Simply put, it would undermine crypto adoption but since the technology of Bitcoin is permissionless there is not much that can be done about it.