Russia-Ukrian Conflict: In 2014, Russia invaded Ukraine and annexed Crimea to its country. At that time the US banned American trade with Russian banks, oil and gas developers and other companies. The ban caused severe and widespread damage to the Russian economy. According to an estimate by economists, Russia loses about $ 50 billion annually due to the ban imposed by Western countries.
However, since then the global market for cryptocurrencies and other digital assets has seen a huge boom. This is bad news for the countries imposing the ban and good news for the countries facing the ban like Russia.
America’s Biden government on Tuesday imposed new sanctions on Russia over military action in Ukraine, aimed at blocking its access to foreign capital. However, experts say that Russian organizations are now trying to reduce the effect of this ban through cryptocurrencies and are preparing to deal with foreign people through it. He pointed out that governments mainly restrict money transfers through banks under the ban, but Russian entities can bypass this control point through cryptocurrencies.
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“Russia has ample time to deal with the methods of this ban,” said Mike Parker, a member of an American law firm dealing with money laundering cases. It would be foolish to think that they have tried to reduce the impact of this ban and this ban. Wouldn’t have thought of ways.”
America and its allies European countries often use ‘ban or ban’ as their most powerful tool to get another country at will. The US especially uses sanctions as a diplomatic force because the dollar is the world’s reserve currency and is used for payments around the world. However, there is a growing awareness of the potential of cryptocurrencies to mitigate the effects of US government bans. This is the reason why the US authorities have now intensified steps regarding the investigation of digital assets.
To ban someone, a government first makes a list of people and businesses that its citizens are not to do business with. There is a provision of heavy fines if caught doing business with the people included in this list. However, the real weapon of effect of the ban is the global financial system. Banks play a key role in enforcing these restrictions – banks around the world play a major role in enforcement: they see where money comes from and where it’s going. Bank officials have to report every suspicious transaction to the investigating agencies under the rules of money-laundering. That’s why banks are also called the eyes and ears of the governments. However, the growing trend of cryptocurrencies is now making banks blind.
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The bank maintains a record of each of its customers. He knows which customer is withdrawing and depositing how much money or to which customer he is sending money. But on the contrary, crypto exchanges and many other platforms rarely keep any records related to their customers. Many platforms allow users to conduct crypto-transactions without revealing their identity. Countries around the world including America are making rules regarding this, but it is not yet effective.
Meanwhile the Russian government is developing its own central back digital currency. It will be a digital ruble (Russia’s currency) that will allow foreign entities to transact with Russia without having to convert their money into dollars. Experts say that Russia has many other cryptocurrency-related tools, which it can use to defy US sanctions.
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