La Russia she turned to cryptocurrency to circumvent the sanctions imposed by the West on its own economy after the invasion of Ukraine. The United States and the European Union have in fact imposed a list of sanctions on the country that have essentially cut Russia out of world trade. However, with the rise in popularity of cryptocurrencies, such assets have provided the country with a possible way to evade these sanctions that would otherwise have remained in place when fiat currencies were the only form of payment.
Why might Russia turn to cryptocurrencies?
One aspect that has attracted investors to cryptocurrencies such as the Bitcoin is the fact that I am decentralized: a decentralized currency is not controlled by an entity. Consequently, sanctions cannot apply to it, regardless of their severity, making it attractive to those who want to evade detection by governments or, in this case, countries seeking to circumvent sanctions.
In recent times, Russia has moved towards cryptocurrencies as a tool to facilitate trade in violation of sanctions. The most important of these was the sanction on the purchase of gas by Russia, which raised the possibility that the country would accept cryptocurrencies as a form of payment for oil and oil gas. By using a cryptocurrency like Bitcoin, Vladimir Putin may be able to completely evade sanctions and the banking system.
In September, Assistant Secretary of the US Treasury for Terrorist Financing and Financial Crimes, Elizabeth Rosenberg, told lawmakers that it is possible for the Kremlin to evade sanctions imposed against it through digital currencies. Senator Elizabeth Warren also echoed this concern, pointing out that the South Korea of the North has already made extensive use of this tool to evade sanctions and that it is just as easy for Russia to do the same.
Who would receive Russian crypto payments?
In light of this, it is not too far off to say that Russia could have an abundance of customers if it switched to cryptocurrency payments for oil and gas. He is already an established player in the oil and gas sector and companies will not have an easy time having to switch suppliers. So it would make sense to address the relatively small inconvenience of converting fiat to crypto to pay Russia rather than spending millions of dollars to switch international suppliers.
The Russia is already softening its stance on cryptocurrencies since the war began. In September, it was reported that the government had reached an agreement with the central bank on a rule that would allow residents to make cross-border payments using cryptocurrencies. In May, Commerce Minister Denis Manturov declared that the country would legalize payments with digital assets "sooner or later"… That moment, now, could be very close.