A third of Russian respondants to a survey confirm that they intend to purchase either Bitcoin or Stable coins within the next 6 months, despite crypto transactions being illgal in Russia. However more concerning to US Federal Lawmakers, is that the Russian Government themselves may turn to cryptocurrencies to fund the war in Ukraine.
U.S. federal lawmakers are expanding efforts to track the potential use of cryptocurrency by Russian leaders and oligarchs to circumvent sweeping sanctions imposed on the country in response to its invasion of Ukraine. Economic advisors and crypto researchers have warned that Bitcoin and other currencies could be used to fund Russia’s war effort and protect the wealth of its oligarchs.
With BTC at around $20,250 and as markets continue to digest the Fed Chair’s remarks, it remains to be seen if Bitcoin can keep the psychological support zone. If that breaks, more pain could involve a retest of mid-June price levels.
Russians turn to crypto amid currency restrictions
Even as crypto struggles through the bear market, adoption in Russia is picking momentum. It’s an observation from the perspective of more people turning to cryptocurrencies to try evade biting restrictions on foreign exchange. Indeed, a recent survey revealed that nearly a third of respondents said they were planning to buy crypto over the next six months.
Marcus Sotiriou, an analyst at UK-based digital assets firm GlobalBlock, says that crypto adoption in Russia is largely being catalysed by the currency restrictions imposed by Russian authorities.
The restrictions, enforced since early 2022 following Vladmir Putin’s invasion of Ukraine that attracted western sanctions, have hurt the ruble. And it’s these restrictions that are pushing more people towards crypto, he added in comments shared with CoinJournal via email.
This is “despite there being no legal way to buy or sell cryptocurrencies in Russia right now,” he noted, commenting on how difficult it is for those looking to use crypto to circumvent the restrictions.
The assets are then liquidated for foreign currency in countries like the United Arab Emirates (UAE) and Georgia.