Sanctions Crypto and Regulation
10th March 2022
The world is changing rapidly before our very eyes. After the fall of the Berlin wall in 1989 it seemed as if Russia was turning its eyes toward the west. Under the leadership of Boris Yeltsin Russia rapidly made radical changes to the exchange rate of the ruple and lifted price controls. State companies were privatised and the economic model became capitalist.
With such radical reforms a period of volatility followed.
Inflation took off and there was great instability and hardship for some time, though many oligarchs made vast amounts of money it must be said.
Things settled down and Russia began to prosper, Yeltsin promoted greater co-operation with europe and also signed arms control treaties with the US.
In 1999 Yestsin was forced to resign and he was succeded by his chosen succesor Vladimir Putin.
Vladimir Putin previously worked for the KGB as a foreign intelligence officer from 1975-1991 and achieved the rank of lieutenant colonel.
From 1996 he served under the Yeltsin administration before he became president in 1999, he has been in power ever since, even under the presidency of Dmitry Medvedev under which Putin was prime minister, it was Putin who was really in charge and pulling the strings.
The video below explains Vladimir Putins rise to power.
Russias economy grew under Putins rule, and he was admired by russians as a strong leader.
In 2014 Putin invaded Ukraine and succesfully annexed Crimea. This incursion was condemmed by the west and sanctions were imposed on Russia which hit their economy.
In 2015 GDP fell by 3.7%, though it rebounded the following year.
In my view the longer that Vladimir Putin has been in power the more authoritarian he has become, he is highly intelligent no doubt and has a huge influence on the media in Russia.
In many ways he is regarded as a master stategist, often outsmarting the west politically.
Putins current invasion of Ukraine is on a whole different scale however. I wonder, has Putin miscalculated this time.
There may be complexities regarding the conflict of which I do not understand but the full scale assault of a soveriegn nation on a pretext of defending Russia surely cannot be justified.
As far as I am aware although it may be true that there are anti russian factions within Ukraine they have never launched an attack on Russia itself.
The US and Europe have imposed the most far reaching sanctions yet upon Russia and the economy is bound to suffer significantly. The sad thing is that the ordinary russian are the ones who will suffer the most.
Here is the case for cryptocurrencies for example Bitcoin Cash.
The value of the russian ruble has fallen by more than 40% in the past few weeks, many russians have sought to buy up cryptocurrencies as a hedge against the falling value of the ruple.
The interest rate in russia has reached 20% and inflation has reached nearly 9% as well.
The sanctions make things difficult for the ordinary people as well as hurting the state.
The US has made it clear that cryptocurrencies are included in sanctions against Russia but how is this possible in reality.
The only thing that they are able to do is ask crypto exchanges to freeze accounts, which will have a limited effect.
Not all people keep their crypto on an exchange. The russian regime must have been anticipating this and no doubt have found ways around this.
While cryptocurrency transactions are recorded on the blockchain, making them transparent and can be analysed by crypto intelligence firms such as 'Chainanlysis' it would be foolish to think that the russians haven't thought about this.
Here is the website of crypto intelligence firm 'Chainanalysis'
Altough this software exists the russian regime have no doubt developed tools which can help mask the origin of such transactions.
This would allow businesses to trade with internationally without detection.
Cryptocurrencies have been successfully been used to evade sanctions by Iran and North Korea for example.
Trading with crypto directly without using an exchange is how they will tevade these sanctions.
Bitcoin Cash with its low transaction fees could see greater adoption as a result of this changing world.
The ordinary people need to understand the importance of holding their own private keys and not keeping their assets on exchanges. If only you have your private key, no-one can take your crypto from you.
It is true that crypto may be used to help oppressive regimes avoid sanctions but also true that it can liberate people and set them free from the constraints of the global financial system.
I hope that this war will end soon, it is tragic to see how much people are suffering.
Does Vladimir Putin care about sanctions or is he so consumed with his ideology that nothing will deter him.
I do not know how things will unfold, things could get even worse but I pray that there may be a peaceful resolution for the sake of humanity.
Article is my own
Pictures courtesy of Pixabay
Video: YouTube
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