Cryptocurrencies could save Russia and they could be the only hope for the Russian government, faced with Western sanctions. Why? We’ll explain it here
The United States and the European Union have imposed heavy sanctions on Russia. With this ample packet of measures, the western governments are seeking to damage the Russian economy. However, experts point out that a wide use of Bitcoin could be President Vladimir Putin’s safety net.
The measures against Russia have the big banks as a mediating element. If a Russian business or a Russian citizen hopes to make some type of operation, the European or American banks can block the transaction. However, the Western governments don’t have an actual way to impede the Russians from using cryptocurrencies and moving their money through the blockchain. The decentralized character of cryptocurrencies is a point in favor for Putin.
Various experts have maintained that, through cryptocurrencies, it will be possible to avoid all sanctions against Russia. The American Treasury recognized this problem some time ago, before the escalation of the military conflict. “We’re aware of the risk that, if they aren’t controlled, these digital assets and payment systems could damage the efficiency of our sanctions,” this institution warned.
Can cryptocurrencies save Russia?
The websites used for carrying out illicit transactions in cryptocurrencies generated more than 1,700 million dollars, the majority in Bitcoin, last year. This “dark web market” is very strong in Russia. “Hydra, considered as being the biggest dark web market in the world, exists there, according to Chainanalysis. Through “Hydra” the Russians could move enormous amounts of money.
Nonetheless, other experts guarantee that neither a greater adoption of cryptocurrencies, nor the Russian black market will be enough to avoid the impact of the Western sanctions. The analysts warn that it’s very difficult to make large purchases of products in cryptocurrencies. Further, the oil trade, which is one of the pillars of the Russian economy, is carried out in dollars.
One of the possible options that Russia is pursuing is encouraging cryptocurrency mining. Iran did something similar. The American sanctions made it so that Iran couldn’t sell all of the energy it produced. Facing this, the Iranians opted to se that energy in mining for cryptocurrencies and obtained income that way. Now, Russia could do the same thing.
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