Data from blockchain analysis firms shows that the purchase and trading of Russian-denominated cryptocurrencies on major exchanges has faltered, disproving theories that the country will switch to digital assets to circumvent sanctions.
When Bitcoin (BTC) surged more than 15% last week, some industry experts attributed the increase to Russians who bought cryptocurrencies while economic sanctions tightened. However, this theory appears to be wrong, as data from Chainalysis showed that the volume of the ruble-denominated cryptocurrency on Thursday reached just $34.1 million, about half of the recent peak of $70.7 million a week ago. February 24.
“Russian trading volumes have been relatively low so far, indicating that the price action is more due to investors being prepared for the expected growth in demand from Russia,” said Alexander Saunders, an analyst at Citigroup, who spoke with Bloomberg about the crypto purchases imposed by the sanctions. And no more. From the demands of Russia itself.
While experts reject the idea that cryptocurrencies can be used to help Russia circumvent economic sanctions, the United States and the European Union continue to tighten regulatory controls over digital assets.
New York State recently expanded its blockchain monitoring capabilities to prevent cryptocurrencies or digital assets from being used to support Russian interests.
New York Governor Cathy Hochhol issued an executive order on February 27 asking government agencies to withdraw from Russian foundations and companies, as well as their support organizations. She said:
“New York is proud to be home to the largest Ukrainian population in the country, and we will use our technological assets to protect our people and show Russia that we will hold them to account.”
To highlight the other side of the story, Jake Czerwinski, Head of Policy for the US Blockchain Association, went so far as to describe these concerns about cryptocurrencies as “completely unfounded.”
Another echo of this sentiment was Ari Redboard, head of legal and public affairs at crypto firm TRM Labs, who said that cryptocurrencies are too late to provide sufficient liquidity to Russia and that the public nature of blockchain is already sufficient. deterrent. For those trying to circumvent the sanctions.
“Russia cannot use cryptocurrency to exchange hundreds of billions of dollars that could be blocked or frozen.”
See also: European Commission will exclude Russian banks from cross-border SWIFT network
In the face of impending regulatory actions by the international community, many of the world’s leading crypto exchanges have decided to blacklist individuals and entities for sanctions. However, Binance refused requests to censor the accounts of “innocent” Russian clients.