Russians sidestep the sanction imposed by Western political powers by switching to Bitcoin crypto as the fiat currency Ruble’s price freefalls to a record low of 118 Rubles per Dollar. This caused BTC to surge 20% more as Bitcoin-to-Ruble transactions increased.
At press time, BTC is valued at US$43,747 which is a drastic change from the US$35,000 plunge by the crypto in late February 2022.
This spike was brought about by investors scrambling to avoid further Western sanctions that would affect their buying power. Over the weekend, the United States and its allies along with the European Union (EU) imposed bans related to the use of Russian fiat currency.
The US stopped Russian banks from accessing SWIFT, a global interbank messaging system as punitive measures against Russia. On the other hand, the EU banned all transactions with the Russian central bank.
This then caused the Ruble to plunge, thus worrying Russian investors amidst other sanctions that will be imposed by the West as the Ukrainian conflict escalates.
‘The ruble is collapsing,’ said Bilal Hafeez, the chief executive of financial platform Macro Hive in a report by Forbes.
‘Russia has been mixed on cryptocurrency but the above actions could see Russia embrace crypto to evade sanctions,’ he added.
Research analyst of cryptocurrency market data provider, Kaiko, Clara Medalie told CoinDesk that all the Ruble-to-BTC activities were focused on Binance and LocalBitcoin, two exchanges that operate in Russia. This spike is at the highest recorded level since May of 2021, according to the analyst.
‘The trend follows a wave of sanctions against Russia, which has disrupted forex markets and caused the ruble to sink to record lows against the dollar,’ she said.
Amidst the issues arising from Russia bypassing sanctions through cryptocurrency, Binance Chief Executive Changpeng Zhao stated that it’s not the place for crypto exchanges to impose these sanctions.
‘We differentiate between the Russian politicians who start wars and the normal people; many normal Russians do not agree with war,’ he said.
However, Zhao assured that those on the international sanction list in Russia will be banned from the exchange.
‘There are a few hundred individuals that are on the international sanctions list in Russia, mostly politicians, and we follow that very, very strictly,’ he added.
This statement from Zhao came after Ukrainian Deputy Prime Minister Mykhailo Fedorov called for the all-out ban of Russian users from crypto exchanges in the fear that Vladimir Putin, head of the Russian state, will use digital assets to circumnavigate the sanctions imposed by the West.
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Bitcoin (BTC) $ 27,409.00 2.16%
Ethereum (ETH) $ 1,655.42 1.81%
Tether (USDT) $ 1.00 0.03%
BNB (BNB) $ 213.44 1.25%
XRP (XRP) $ 0.512919 1.8%
USDC (USDC) $ 0.999938 0.04%
Lido Staked Ether (STETH) $ 1,654.02 1.91%
Solana (SOL) $ 23.98 1.15%
Cardano (ADA) $ 0.261119 1%
Dogecoin (DOGE) $ 0.061484 1.84%
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