Cryptocurrencies Unlikely to Help Russia Evade Sanctions – Bitcoin News

Russia’s ability to employ cryptocurrencies to circumvent international sanctions is restricted by the limited size of the crypto market, according to Moody’s. Even though bitcoin is being used in smaller transactions, the low liquidity of the crypto market prevents Russians from leveraging its utility.

Crypto Assets Not Viable Option for Sanctioned Russia, Moody’s Report Suggests

Western sanctions, imposed on Russia over its invasion of Ukraine, have raised questions whether Russian citizens and government can utilize cryptocurrencies to bypass the restrictions and conduct financial transactions, Moody’s Investors Service notes in a report published this week.

The agency’s bond credit rating unit highlights the recent increase in the volume of small transactions made by Russians. The authors point out that, despite being anonymous, crypto assets do not provide any useful information when it comes to getting around financial penalties. These authors insist:

Given the ruble-to-crypto market’s limited size and low liquidity, we believe that, for now, crypto assets are unlikely to provide a viable and efficient solution for individuals to circumvent sanctions.

Moody’s also recalls that officials in Moscow have recently indicated that Russia may accept payments in cryptocurrency for its oil and gas exports. However, its experts think that again the market’s current size and insufficient liquidity would undermine this option, too.

Crypto platforms must also comply with anti money laundering requirements. “A centralized digital asset venue with well-established screening and compliant onboarding processes would be able to flag and disable blacklisted accounts,” the analysts point out.

While illicit activities of bad actors that occur off centralized crypto exchanges or on unregulated digital asset platforms could remain undetected and unreported to authorities, such activities are not large enough at the moment to enable sanctioned countries like the Russian Federation to avoid the restrictions Moody’s concludes.

Is Russia trying to avoid financial sanctions by using cryptocurrency? Comment below.

Lubomir Tassav

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.