Despite financial specialists outlining the absolute lack of plausibility for this course of action, cryptocurrencies are once again being criticized, this time as vehicles for Russian sanctions evasion, despite much trumpeting by US and European financial leaders.
Russia has been extensively sanctioned in recent weeks, including being cut off from the SWIFT global payments system and barred from utilizing the majority of its cash reserves.
Sberbank, Russia’s largest bank, has had its own issues, with its shares plummeting and it being unable to trade in Europe. However, according to a Business Insider piece, the Russian central bank has granted the bank permission to develop its own cryptocurrency.
The cryptocurrency, known as sbercoin, has been enthusiastically embraced and blamed by some as a means of circumventing restrictions imposed on Russia’s traditional financial system.
Asheesh Birla, general manager of blockchain-based payments service company RippleNet, was reported in the article as reflecting the sentiments of other financial experts, saying:
“It’s going to be really difficult for them to gain traction here since they also need a liquid exchange that will accept the Russian currency,”
On the viability of using the sbercoin to transfer money, he added:
“It’s analogous to taking your own bank account and recording it in a ledger. Unless you can start trading it for other things, it’s not really valuable. And so far, the data I’ve seen indicates that it’s not very liquid.”
According to Chainalysis, the volume of ruble-to-crypto trading has actually decreased since the beginning of Russia’s invasion of Ukraine, following an initial rise of 900 percent in just five days. According to Chainalysis, cryptocurrency adoption was normally strong in Russia before to the invasion.
With a total market size of only $2.2 trillion, one has to wonder how US Senator Elizabeth Warren and European bank chief Christine Lagarde can continue to push this crypto sanctions evasion story in the face of such clearly obvious evidence to the contrary.