March 24, 2023

“Russia cannot use cryptocurrency to bypass the current restrictions imposed on them,” stated the Executive Officers of Binance and Coinbase.

Amidst the ongoing crisis between Ukraine and Russia, several organizations, state governments and financial institutions have melted out sanctions on the oil giant Russia for its continued assault on a sovereign nation.

However, there have been numerous concerns that these financial restrictions on the country will not produce the desired results if they decide to use digital currencies for domestic and foreign transactions. Several market experts believe that the likelihood of digital currency being used for such a purpose is improbable. On the other hand, the European Union has taken steps to regulate the crypto space while urging all crypto platforms to deny access to Russian users.

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Previously, the European Central Bank (ECB) president ordered policymakers to draft crypto laws to prevent Russia from utilizing the technology to avoid sanctions. The CEOs of two major cryptocurrency exchanges have expressed their views on whether cryptocurrencies can or cannot be used to avoid sanctions.

“Cryptocurrency Cannot Be Used To Bypass Restrictions.”

According to the Guardian, the CEO of Binance, Changpeng Zhao (CZ), said, “Presently, the media and government are putting more effort and emphasis on cryptocurrency and regulations. The fact is that cryptocurrency is not enough for Russia.” “Crypto represents not up to 0.3% of global net wealth today.” “This proportion applies to Russia as well,” Binance CEO stated.

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The Binance President emphasized that virtual currencies are “not a great instrument for criminal activity,” citing that everyone can inspect all crypto transactions.

“Trying to smuggle large sums of money using cryptocurrency would be more detectable than it is to use US dollars.”

Brian Armstrong, CEO of Coinbase, expressed a similar opinion. From his Friday tweet, he said, “the chances of Russian oligarchs utilizing crypto to dodge sanctions is very slim. Since it is a public ledger, attempting to smuggle large sums of money using cryptocurrency would be very detectable than using art, gold, US dollars, or other valuable assets.”

A Likely Alternative For Russia

However, the EU, the G7 nations, and a number of other governments across the world are taking steps to prevent Russia from utilizing cryptocurrencies to avoid sanctions. A few days ago, Visa and Mastercard shut down operations in the country, thereby preventing the usage of card services. There are reports that Russia might likely turn to Unionpay, owned by China, for international payments and card services.

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Recall that Russia’s Central Bank was against the legalization of cryptocurrency in the country from the onset; it is improbable that they would turn to virtual currencies now that the ruble has dropped.

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