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Crypto alone will not help Russia bypass sanctions: Analysts

Crypto alone will not help Russia bypass sanctions: Analysts
Crypto alone will not help Russia bypass sanctions: Analysts

Cryptocurrency analysts have reportedly claimed that cryptocurrency alone will not save Russia from the onslaught of sanctions imposed by Western nations, aimed at punishing Moscow over Ukraine’s invasion.

The European Union, United Kingdom, United States, and Canada announced new sanctions this week that targeted Russia’s central bank as well as its national wealth fund, with the US Treasury Department also limiting President Vladimir Putin’s ability to use the country’s foreign reserves worth $630 billion.

The sanctions follow the US and its allies cutting off a few Russian banks from SWIFT, a secure messaging network that is used for transactions worth trillions of dollars.

By enforcing sanctions, transactions can be tracked through the banking system. Nations like North Korea and Iran, in order to bypass similar sanctions, have used cryptocurrencies as they operate outside the limits of the financial system.

Roman Bieda, Head of Fraud Investigations, Coinfirm, stated that cryptocurrencies can be used to hide wealth and evade sanctions.

However, crypto experts claim that Russia’s case is different, as the country has smaller scope due to the large scale of the overall economic blow and limited adoption of different digital currencies.

Ari Redbord, Head of Legal and Government Affairs, TRM Labs, stated that Russia, being deeply involved in the global financial system for much longer than other crypto-using nations, will have difficulty in using crypto to replace the hundreds of billions of dollars that might be blocked or frozen.

Bieda also stated that while sanctioning governments cannot see who the sender of crypto is, they can see the amount of money being moved, and that these funds can be monitored after a suspicious address is flagged.

Tom Robinson, a global expert in crypto, stated that if future sanctions target Russia’s oil and gas sector, Moscow can also use surplus energy or computing power for generating and mining crypto, like Tehran, and monetize its energy reserves on global markets without moving them outside Russia.

However, it would be an almost negligible amount for the oil and crude export giant, with analysts believing that such sanctions are unlikely as well.

Source credit: https://www.aljazeera.com/economy/2022/3/1/crypto-will-not-save-russia-from

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Sunil Jha

Sunil Jha has been a part of the content industry for close to two years. Having previously worked as a voice over artist and sportswriter, he now focuses on writing articles for newsorigins.com, across a slew of topics, ranging from technology to trade and finance. With a business-oriented educational background, Sunil brings forth the expertise of deep-dive research and a strategic approach in his write ups.