Russia’s central bank maintains its stance and wants Russians to avoid cryptocurrency. Despite the current economic downturn, the Central Bank of Russia (CBR) maintains this stance.
The CBR’s Position Remains Unchanged
Since the beginning of the Ukrainian invasion, the ruble has been in free fall for a variety of reasons. Self-imposed penalties on citizens, as well as several sanctions imposed on the energy giant by NATO and its allies. Several Russian banks have been pulled out of SWIFT as part of measures imposed in retaliation for the invasion, according to EU governments.
As a result, several Russians fear seeing the value of their assets and savings plummet. For some, the crypto market might give access to foreign exchange in the form of stablecoins pegged to the dollar or considered safe-haven assets such as Bitcoin. Arcane Research reported at the start of the month that the USDT/RUB trading pair had reached a new trading volume ATH of $35 million, with a comparable rise in the BTC/RUB pair.
This could be evidence of Russians using cryptocurrency to hedge against currency depreciation. However, there is another consequence of this: the selling pressure further depresses the value of the ruble, which is something that every central bank strives to avoid for its currency. Given this, it is hardly surprise that the CBR continues to be adamantly opposed to cryptocurrency.
Maria Telegina, chief of the Bank of Russia’s Department of Financial Technologies, stated, “The Central Bank currently maintains the position that was previously announced and published on the official website.” She stated this in response to a question regarding the apex bank’s stance on cryptocurrency in light of the escalating sanctions and economic hardships.
The bank published a paper titled “Cryptocurrencies: Trends, Risks, and Measures” in January. The bank raised various worries regarding cryptocurrencies and cryptocurrency mining in the aforementioned research, ranging from environmental harm to their usage in money laundering. The CBR proposed that the asset class, as well as mining activities, be prohibited, putting to rest fears that the country will turn to cryptocurrencies to avoid penalties.
Major Exchanges Refuse to Cooperate with Ukraine
As the crisis in Eastern Europe rages on, NATO and its allies have resorted to sanctions in an attempt to persuade Putin to reconsider his invasion. However, there are fears that these financial restrictions have a key flaw: they do not apply to cryptocurrencies.
There has been a push for the EU to expedite the development of a regulatory framework for the asset class. Ukraine’s Vice Prime Minister, Mykhailo Fedorov, also took to Twitter to propose that major cryptocurrency exchanges block Russian crypto addresses.
Exchanges including Binance, Coinbase, and Kraken have stated that they are unable to meet such demands. Jesse Powell, CEO of Kraken, stated that Kraken could only do so if forced by law, which he believes is approaching.