Russians Turn To Crypto As the West Imposes Financial Sanctions

Richard Marley
March 11, 2022
2 minutes read
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Data has shown that Russians are turning towards transactions in cryptocurrency as a result of western sanctions on traditional financial institutions.

The sharp drop in the ruble and rising concerns of sanctions on some of the major Russian banks have led citizens to transact in Bitcoin and other cryptocurrencies. Most of the traditional banks have been blocked by sanctions from using a key international payment system.

Apart from other sanctions designed to penalize Moscow for its invasion of Ukraine, the West has agreed on February 26 to impose bans on seven Russian banks from using the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the global banking communication platform.

This action dramatically affects the operations of these banks including processes of sending and receiving remittances.

“Even people who were not in crypto at all are now considering how to get Bitcoin, Ethereum, or USDT and basically save some of their money before the country hits a period of extreme hyperinflation, which is already starting now,” Gleb Jout said, head of Russia at crypto exchange Bitget.

After the Russian invasion of Ukraine on February 24, the daily exchange volume of the ruble and Bitcoin surged to a nine-month high, while ruble and USDT, a stablecoin used as a stepping stone for the cryptocurrency market, spiked to an eight-month high.

For a long time, Bitcoin has been considered an alternative currency to fiat and has been invested in as a valuable currency as well as being used as a means of transaction.

Since mid-February, the Russian currency dropped by 45% to a value of ₽136.50 per U.S. dollar. For the Russian citizens, this drop has the same effect as the financial crisis of 1998 where the ruble fell from ₽6 to ₽21 per U.S. dollar over a three-week period in September, wiping out the savings of many households.

“The adoption is coming and it’s very, very real,” Jout said while highlighting the way crypto can benefit Russians. “Especially in Russia, because you have a population of 145 million and I expect that maybe within this year 15% to 25% of them are going to be totally onboarded into cryptocurrency.”

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IMF Urges Central Bank of Seychelles to Upgrade Transparency and AML Controls
The Central Bank of Seychelles (CBS) has been advised by the International Monetary Fund (IMF) to have transparent practices and AML controls.

The International Monetary Fund (IMF) has urged CBS, the Central Bank of Seychelles, to incorporate refined practices in different accountability and governance areas. These include confidentiality, supervisory & confidentiality policies along with internal AML/CFT protocols.

According to the statement by IMF, CBS is giving information regarding legal structure, mandate, and a few key elements related to anti-corruption arrangements, risk and human resource management, and accountability on its website.

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“The legal mechanism for confidentiality issues has been established, but the dissemination and disclosure of the confidentiality framework could be enhanced. The CBS discloses basic information on its AML/CFT supervisory powers and policies, as well as on its related internal control framework, but disclosures on the processes and outcomes of its AML/CFT external policies and internal controls are limited,” said CBS Transparency Code Review of IMF.

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Russians Turn To Crypto As the West Imposes Financial Sanctions

An Overview of Perpetual KYC

The Need for Perpetual KYC in Banking Sector

Recent Crime Cases in the Banking Industry

Criminal Gang in US Charged with Bank Fraud and Money Laundering

Two Former Employees of Major Bank Charged with Loan Fraud

Global Regulatory Authorities Monitoring the Banking Sector

US

UK

Securing Banking Organizations Through Perpetual KYC

What Shufti Pro Offers?

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Let’s prove your customer’s

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