At the beginning of the year, the Russian central bank was still toying with the idea of banning cryptocurrencies.After the war of aggression against Ukraine, the Russian government was overthrown.Analysts say Western sanctions should not be circumvented with Bitcoin.
Just three months ago, Russia wanted to completely ban cryptocurrencies.Now, after the war of aggression against Ukraine, it is suddenly not talked about.Russia even wants to deliver energy in exchange for bitcoins, Duma deputy Pavel Zavalny explained.A few days ago, Prime Minister Mikhail Mishustin also campaigned for greater acceptance of cryptocurrencies.Bitcoin 42,552.58
Crypto markets immediately influence these statements.Already after the invasion of Ukraine and the exclusion of Russian banks from the Swift system, cryptocurrencies took advantage.
Over the past few weeks, exchanges have seen significantly higher trading volumes and hash rates, i.e.computing power, in Russia – in some cases by more than 900%.All of this drives prices up in the short term.
The suspicion: In order to circumvent Western sanctions, Russia could simply switch to cryptocurrencies.Dollars, euros or yen would then no longer be necessary – not even precise data on the origin of the money.
But can Russia even have a strategic interest in Bitcoin? Analysts are still arguing over this issue.Trading volume stabilized again
One thing is certain, no sanctions circumvention can be derived from trading volume and hash rate alone, Timo Emden of Emden Research tells Capital.Two points should be distinguished: crypto-currencies as a means of payment and as an asset.
Western countries are watching the first variant in particular closely.
Meanwhile, the Russians have traded 900% more rubles in digital currencies.
However, trading volume within the crypto scene stabilized again after the peak at the start of the war.Russian institutional investors transferred only $62 million in the first four weeks of the war.The data does not show that Russia is increasingly exchanging goods via digital currencies.“If it had been a really big re-parking, we would have seen more climbs,” says Emden.
It is more realistic for Russian individuals to protect their assets.Sanctioned oligarchs could also be among them – but this is difficult to prove due to the blockchain.“I assume that the oligarchs have already managed to invest funds in crypto assets,” says Emden.In other words, it is mainly individuals who are responsible for the first peak.Once exchanged for Bitcoin, payment flows can hardly be traced – unless investigators know the person behind the wallet ID.
The blockchain transparently shows who is transferring how many coins and when.But who hides behind the ID is sometimes anonymous and the ID consists of a maximum of 35 characters.How sustainable is Russia’s crypto interest?
The EU now wants to change this and relies on the so-called “know your customer” (KYC) procedure.Transactions in Bitcoin, Ether and other cryptocurrencies must be traceable in the same way as traditional transfers – this is the aim of the Transfer of Funds Regulation (TFR).This is not a direct reaction to the Russian war of aggression, CDU MP Stefan Berger told Capital.But he also noticed more intense discussions, which probably also influenced last Thursday’s decision.The low trade volume of $62 million does not argue for systematic sanctions evasion, Berger says.In this regard, he sees the Bitcoin offensive as a flash in the pan for Russian retail investors.
Analyst Timo Emden also does not believe in sustained crypto interest from Russia.
“Right now they’re using bitcoin more as a marketing tool.It’s new, it’s independent of the state.Sounds good.” In addition, the payment speed is higher than with IBAN transfers.
On the contrary, Moscow is preoccupied with its own digital currency – if you will, an e-ruble.Western countries, especially China, are also working hard on their own projects.“It’s like a race to land on the moon.And the question is, which system will Russia connect to?”
In this regard, Bitcoin could become a test for Russia, as the systems work similarly.Both work on blockchain technology, the only difference is that Bitcoin and Co.
are organized in a decentralized way.An e-ruble or e-yen would be issued by the central bank.
The advantages of a digital currency are obvious: administration costs per e-ruble are usually zero and it could also be easily integrated with other payment systems.And: with a digital currency, Russia could become less dependent on the US dollar.It’s a stated goal of Russian President Vladimir Putin, who could actually use it to effectively circumvent sanctions.
This text is the first to Capital published.Related .