Experts fear that Russian institutions could use cryptocurrencies like Bitcoin to circumvent Western sanctions. The US now wants to close this back door.
Exclusion from the Swift payment system, blocking of central bank assets – the West’s punitive measures against Russia are hitting the country’s financial sector in particular. But there are ways to avoid the sanctions.
One leads to cryptocurrencies such as Bitcoin, Ether and Co. Experts regard them as a suitable vehicle for Russian billionaires and oligarchs to park assets and thus protect them from sanctions. But after the EU, the USA now also want to put a stop to this.
First step to crypto trading regulations
According to reports, US President Joe Biden is expected to sign an executive order this Wednesday that will mark a first step in regulating cryptocurrency trading. Government officials in the United States had recently warned that Russia could use digital currencies to avoid war sanctions.
The financial measures had already caused the ruble to fall to record lows and the Russian stock exchange to shut down.
USA could introduce its own cryptocurrency
The decree is now planned to instruct the US Departments of Justice and Treasury to examine the introduction of the central bank’s own cryptocurrency. It will also examine how policies and regulations can be developed for cryptocurrency trading.
Last week, the EU announced that it would take action on cryptocurrencies to prevent sanctioned individuals and institutions from switching to unregulated cryptocurrencies.
Bitcoin price surges after sanctions
After the international community imposed sanctions on Russia, the price of Bitcoin and other cryptocurrencies rose sharply. Experts suspect that the cause is a flight to digital currencies by people in Russia who do not want to sit idly by and watch their own currency depreciate.
But also in Ukraine, after the Russian troops invaded, larger exchange volumes towards Bitcoin than usual were observed.
