Jake Chervinsky, a member of the Blockchain Association has a pretty strong belief that politicians don’t have to worry about Russia’s use of crypto for bypassing economic sanctions.
This is due to the fact that he thinks the reason is not feasible enough at this particular scale. According to top cryptocurrency news today Former U.S. Secretary of State Hillary Clinton as well as the current President of the European Central Bank Christine Lagarde are really concerned that Russia could use crypto for bypassing the sanctions.
The country has been mostly cut off from the SWIFT cross-border transaction system and businesses in America and other western countries are prohibited from doing business or transacting with Russian banks and the national wealth fund.
The Head of Policy at crypto policy promoter the Blockchain Association in the U.S. Jake Chervinsky posted a lengthy Twitter thread on the 2nd of March explaining how “Russia can’t and won’t use crypto to evade sanctions.”
Chervinsky stated three reasons it is unlikely that Russia will use crypto to skirt U.S. sanctions. The first is that the sanctions are not limited to USD, and it is now illegal for any US business or citizen to transact at all with Russia. He said, “It doesn’t matter if they use dollars, gold, seashells, or Bitcoin.”
The second reason is that the financial necessities of a nation like Russia far exceed the current capabilities of crypto markets which Chervinsky called “too small, costly, & transparent to be useful for the Russian economy.” In other words, even if Russia could access enough liquidity it still couldn’t hide its transactions in such a market.
Finally, the country has spent years trying to “sanctions proof” itself but has failed to build any meaningful crypto infrastructure or even finalize crypto regulations. Chervinsky says that crypto simply does not appear to be part of Russia’s plans to mitigate the effects of sanctions.
“The reality is Putin’s spent years trying to sanctions-proof Russia & crypto isn’t part of his plan. His strategy included diversifying Russia’s reserves into yuan & gold (not crypto), shifting trade to Asia (not onto blockchains), bringing manufacturing onshore, etc.”
But other experts told the outlet that said Russia’s case is different because of the scale of sanctions, its sluggish rate of crypto adoption, and lack of depth in markets. Ari Redbord, Head of Legal and Government Affairs at crypto crime investigator TRM Labs said the transparency of blockchain was a natural deterrent to sanction evasion in this case. “Russia cannot use crypto to replace the hundreds of billions of dollars that could be potentially blocked or frozen.”
Cointelegraph made a report on the 25th of February that ECB President Lagarde was eager to get the Markets in Crypto Assets (MiCA) bill passed by the European Parliament as soon as possible in order to give European authorities the means so that “crypto-assets can actually be caught.” Lagarde is pushing to pass the policies urgently in order to prevent Putin from potentially being able to evade sanctions with crypto.
In an interview with Rachel Maddow on MSNBC this week Hilary Clinton urged U.S. President Joe Biden to bar Russia from crypto trading. She and Maddow discussed the national security threats that could exist in regards to cryptocurrency and Clinton said, “The Treasury Department and Europeans should look hard at how they can prevent crypto markets from giving an escape hatch to Russia.”
Also Read: Hillary Clinton has asked the Biden Govt to Exert Pressure on Crypto Exchanges to Prevent Russian Users
“I was disappointed to see some of the crypto exchanges, not all of them, but some of them are refusing to end transactions with Russia from some philosophy of Libertarianism.” According to top cryptocurrency news today, Democrat Senator Elizabeth Warren also took the chance on 1st March to state that American financial regulators should scrutinize digital assets because they risk “allowing Putin and his cronies to evade economic pain.”
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