Recently, the Deputy Prime Minister of Ukraine Mykhailo Fedorov Call “Destroying” crypto assets owned by Russians due to the ongoing war between the two countries. Ukraine’s European allies are also concerned about Russia’s ability to use cryptocurrencies to circumvent sanctions.
But ironically, it seems that one of the biggest proponents of banning access to cryptocurrencies for Russian citizens and financial institutions is the Central Bank of Russia (CBR). how ok report As local news site Tass.ru reported on Thursday (March 3), the CBR maintains its stance on the ban on issuing, mining and circulation of cryptocurrencies in Russia.
“The central bank now supports the position previously announced and officially announced on its website.”
In times of war, states often have to significantly increase spending, such as printing new money, to fund their military efforts. However, this is fueling runaway inflation and enticing individuals to exchange local currencies for foreign currencies (including cryptocurrencies) to protect their savings.
However, this would in turn create selling pressure on the local currency, raising the exchange rate and hampering war-financing efforts. As a result, wartime countries often apply strict exchange controls, as Russia and Ukraine have done. Therefore, the downsides of cryptocurrencies are destabilizing the ruble and vicariously crippling Russia’s war effort, and potentially outweigh the benefits of using cryptocurrencies to circumvent sanctions.
According to a report by Arcane Research this week, the daily volume of Tether (USDT) with rubles on Binance has hit an all-time high (ATH) of $35 million. Russian social media members appear to be deeply concerned about the ruble’s depreciation and how cryptocurrencies can help them protect their savings.
“You need to buy something (cryptocurrency), the ruble will soon be cheaper than toilet paper,” said user Roman Buchyn.
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