Since the Russian invasion of Ukraine which Russian President Putin termed a special military operation, many countries have imposed heavy sanctions on the country leading to the breakdown of the country’s economy. A lot of financial sanctions have been declared upon Moscow and this has built up speculations that the only strategy that can be deployed by the President of Russia, Putin, is buying into crypto.
After meeting with the G7 leaders, the US President, Joe Biden announced on his Twitter page the following tweet.
It is not only countries that have imposed sanctions on Russia, but also companies and organizations that have cut off the relationship they had with Russia. There are many instances of this case and this includes the football governing body UEFA banning Russia-based clubs from participating in competitions such as the UEFA champions league and the UEFA Europa League.
Assets of Russian oligarchs and elites in other parts of Europe and the Americas have been frozen. One of the most devastating sanctions issued against Russia was expelling them from the SWIFT system, which acts as an important communication line that financial institutions across the globe make use of.
Russia’s economy has felt the impact of these sanctions, as a report shows that there are increasing queues in automated teller machines in Russia. The telecommunications, mining, manufacturing, energy, and transportation sectors of Russia’s economy have all been affected by these sanctions. Stocks in Russia are already down as there is panic in the market and also many international banks and exchanges in Russia are closed down.
But as Russia continues to receive sanctions from different countries, companies, and organizations, there is still speculation that Russia may be able to evade these sanctions by buying into crypto. Ever since the inception of cryptocurrency, Russia has been among the top countries where the crypto business flourished. There are more than 12% of the whole crypto businesses that are in Russia, and Putin can make use of this to reduce the effect of the sanctions Russia is receiving.
As the Russia-Ukraine conflict continues, the only means through which Russia’s President, Putin, can still carry out international transactions and prevent the economy from crashing down is by buying into crypto. President Putin can make use of non-compliant crypto exchanges such as Chatex and SUEX to trade its crypto in its reserves.
Why Putin Will Buy Into Cryptocurrency
Since the President of Russia, Vladimir Putin is aware that his country has been greatly affected by the sanctions the US, European Union, and other companies have issued on them, one of the strongest options is buying into crypto. Here are the reasons for this:
It Will Help In Making Transactions:
Since Russia’s financial institutions were sanctioned, there has been a rise in the number of queues that are seen at ATMs. There have also been some speaking out by the Russian oligarchs and elites about how hard it is to make financial transactions. Putin adopting cryptocurrency means that there will be some ease in making transactions.
Since one can access cryptocurrencies anywhere, so long as there is a stable connection, Putin will buy into crypto in this Russia-Ukraine conflict because of this reason. This means since Russia has already been cut off from the Swift system, it can still be able to make important transactions with cryptocurrency without having to make use of international banking systems.
Reduction Of Impact On the Economy:
The US dollar is a currency that is used for making many international transactions, and more than half of the international transactions that are made in Russia are carried out in the US dollar. Since sanctions were imposed on Russia, its economy has depreciated very much. A way that Putin can build up and keep his country’s economy sustained is by buying into crypto so that businesses can still be carried out between countries to build the economy bit by bit.
How Putin Will Buy Into Cryptocurrency
Buying into crypto is one of the alternatives that Putin has to keep financial transactions stable in Russia since the global financial systems have been cut off from the country. Some of the ways that Russian President, Vladimir Putin, can do this is by:
Using Non-compliant Crypto Exchanges:
One of the ways that Russian President, Vladimir Putin, can make use of crypt to reduce the impact of US and European Union sanctions on Russia is by making use of native crypto exchanges or crypto exchanges that are not complying with the sanctions such as Chatex and SUEX exchange.
Trading Its Cryptocurrency With Neutral Countries:
Some countries are neutral or supporting Russia in the Russia-Ukraine conflict such as the United Arab Emirates, India, and China. Vladimir Putin can prevent a total crash of Russia’s economy by trading the crypto that Russia has accumulated over the years with them. Citizens also can be able to make payments for goods and services that they need from such countries with cryptocurrency. Not only countries, but Russia can also be able to trade the crypto it has with over the counter traders (OTC) that are available to trade with them
Since Russia’s invasion of Ukraine, the US and the entire European Union have imposed heavy sanctions on Russia for their actions against the people of Ukraine. Not only governments of countries, but also companies and private organizations have also cut off all relations with Russia because of this act. This is seriously affecting the people of Russia, and with the country cut off from Swift, all indications point out that Buying into cryptocurrency is one of the ways that Russian President, Vladimir Putin, can evade and reduce the effects of these sanctions on Russia’s financial institutions.