Cryptocurrency effect on Russian Economic Sanctions
International economic sanctions are always proven to be a stumbling block. However, this time sanctions are dealing with crypto, which is new technical economy.
Many nations around the world have imposed sanctions on Russia as a result of its invasion of Ukraine, and Russia is turning to cryptocurrencies to deal with the penalties. As a result, economic sanctions are having little impact on Russia.
El Salvador Example
When El Salvador's President, Nayib Bukele, introduced bitcoin as legal tender in his nation, the IMF issued sanctions to stop it, so the United States. However, that had no effect on El Salvador's economy, which grew instead of tanking. The situation in Russia is currently different, as economic sanctions are being enforced on it with great caution.
Russian Situation
The majority of multinational enterprises have fled Russia as a result of the sanctions. Russian accounts have also been suspended by online payment networks such as PayPal and SEPA. These restrictions are having a direct influence on the Russian population, and even individuals who have never used cryptocurrency are becoming more interested in the digital economy.
Crypto Challange
To solve all of the weaknesses in the embargo on Russia, the United States, and the European Union, have developed rules for the inclusion of crypto assets. Despite the fact that numerous crypto exchanges have blacklisted Russian customers as a result of these directions, the majority of the large exchanges are not yet ready to implement full sanctions against regular Russians; nonetheless, the pressure is gradually increasing on them as well.
Under such pressure, centralised exchanges may lose appeal by targeting average citizens, but Russian citizens might escape the ban by using decentralised exchanges/wallets to store their bitcoins and other cryptos. The Russian government has also begun to expand its influence in the cryptocurrency space by converting many abandoned industries to BTC mining farm.
Possible Conclusion
As international economic penalties on cryptocurrencies prove to be ineffective, several countries are experimenting with novel ways to justify enforcing them. In Russia, the public's economic security provided by cryptocurrencies is being tested.
