Binance, Coinbase and Coinbase are not convinced that cryptocurrency could be an effective way to assist Russia with Western sanctions.
Binance CEO and Coinbase CEO: Crypto is not useful for evading Sanctions
There have been concerns worldwide about the possibility that cryptocurrency might be used to avoid sanctions.
Chief executives of the two largest cryptocurrency exchanges, Binance and CZ, have spoken out to discuss whether or not crypto is a good tool for circumventing sanctions. The Guardian quoted Changpeng Zhao, Binance CEO (CZ), as saying:
The media and politicians currently focus a lot on cryptocurrency and sanctions. It is not enough for Russia to use crypto.
“If we look at the crypto adoption today, there is probably about 3% of the global population with some kind of crypto exposure (ie, owning some crypto),” Zhao continued. “Of those, most only have a small percentage of their net worth in crypto. On average, less than 10%. This means that crypto currently accounts for less than 0.3%. This percentage applies equally to Russia.”
According to Binance’s boss,
Russia is not interested in crypto because of its traceability. It is also easily tracked by governments all over the globe.
Furthermore, Zhao said using privacy-focused cryptocurrencies, such as monero, would not work either because the market capitalization of XMR is $3 billion compared with Russia’s GDP of $1.5 trillion.
Citing that every crypto transaction can be scrutinized by anyone, the Binance CEO stressed that crypto assets are “not an effective tool for illicit activities.”
Brian Armstrong, Coinbase CEO shares the same sentiment. Friday’s tweet was from him:
We don’t think there’s a high risk of Russian oligarchs using crypto to avoid sanctions. It is easier to trace crypto than U.S. dollar cash, art or gold because it has an open ledger.
The G7, European Union and many other countries around the world are taking steps to stop Russia using cryptocurrency to avoid sanctions.
U.S. Treasury Department published a report last year that stated crypto decreases the effectiveness of U.S. Sanctions. The U.S. Treasury Department is monitoring Russian attempts to avoid sanctions by using crypto.
Are you a believer that cryptocurrency could help Russia avoid sanctions? Please comment below.
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