While the US sought to prevent Russia from using crypto to avoid sanctions, Bitcoin and other big cryptos soared.
Bitcoin’s value climbed by over 15% at one point, even as Russia continued to bombard Kyiv and Kharkiv with rockets. Cryptocurrencies like Ether rose more than 12%, and most of the big ones were also in the black.
The approximately 200,000-strong invading force may deploy more severe tactics after last week’s surprise Ukrainian pushback. Russia-Ukraine border discussions ended without a report to their governments. European and US sanctions began to hurt the Russian economy.
Vice-Premier and Minister of Digital Transformation Mykhailo Fedorov has already urged that major crypto exchanges block Russian consumers’ addresses. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) has expelled some Russian banks.
They can no longer do interbank transactions with anyone outside of Russia because of this. Cryptocurrency has been considered as a tool for Russia to circumvent these and other sanctions.
Investors saw the move and countermove as a boost for blockchain solutions competing with SWIFT. After the new round of Russian sanctions, investors expect a surge in decentralized finance.
Bitcoin is the largest cryptocurrency by market value, was trading at just above $43,000, its highest level since mid-February. This was the highest level since then. Ether, the second-largest cryptocurrency by market value, was trading at about $2,900 and moving in the same way.
Russia can’t Dodge Sanctions by Using CBDCs
Banks around the world have agreed to keep Russia out of SWIFT. There is a ban on US businesses and people working with Russia’s central bank. Moscow’s stock market is not open to foreigners because they are afraid of people selling off their stocks. Russia has a lot of rubles.
Monday brought a lot of negative news, as Western sanctions against Russia harmed the country’s economy. People also said that this was the first sign that the U.S. dollar was going to lose its power. The central bank digital currency (CBDCs) was utilized to breach the Iranian sanctions restrictions.
Some observers of the Russian invasion anticipated the petroyuan would become a new crude oil trading currency. They think that Russia is using the renminbi to avoid sanctions because it has a lot of money.
The yuan currency is not freely convertible. China’s central bank has very strict rules about how much money can be sent out of the country. Some $50,000 can leave the country each year. As a result of Donald Trump’s trade war with China, compliance checks have become even more demanding.
Because the People’s Bank of China doesn’t want the yuan money trading for free, that’s not what they want to happen. Huge amounts of money keep China’s currency in a certain range. When the yuan rises, banks must either add reserves or burn them to keep the band together.
So, China doesn’t want the yuan to become more and more popular outside of China. Beijing might start talking about giving up control of the currency in the future. However, the Chinese currency, the yuan, is not for complete capital account transparency.
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