After anticipating a turn of events for a while, the die is finally cast. Earlier this week, Russia launched a large-scale invasion of neighbouring Ukraine after months of mounting tensions. The crypto market reacted violently and bitcoins (BTC) value plummeted. Many are now awaiting harsh sanctions to be announced by the West. According to experts, however, it could be that Russia will utilize crypto to largely circumvent these sanctions.
Russia and Sanctions
With the unprovoked invasion of Ukraine, it is almost certain that Russia will become the target of far-reaching sanctions from the West. These sanctions will try to isolate Russia from the rest of the world, and especially the financial sector will be hit hard.
Both the EU, the United Kingdom and the United States have already announced the first new round of sanctions that will go much further than those dating back to 2014 after Russia’s annexation of Crimea. President Vladimir Putin seems unfazed however, and the Russian government seems to express little concern so far.
“Russia has had a lot of time to think about this particular consequence. It would be naive to think they haven’t mapped out exactly this scenario.”
Legalizing crypto
Last Monday, the Russian Ministry of Finance submitted the draft cryptocurrency regulation bill, just days before invading Ukraine.
The draft maintains the current ban on crypto payments for goods and services, puts a limit on the number of Rubles people can invest in cryptocurrency, and puts limits on crypto mining.
The Russian crypto market was valued at more than $200 billion in early February, about 12 percent of the global market. According to the Russian government, 5 billion worth of transactions are performed using cryptocurrencies in the country every year, and the population of 144 million
