...By Henry George for TDPel Media.
Russia is employing cryptocurrencies to evade financial sanctions imposed by the UK, EU, and USA following its invasion of Ukraine.
The sanctions include the freezing of assets worth €21.5 billion and blocking assets worth €300 billion from the Russian Central Bank in the G7 and EU.
In response, Russia has employed various tactics to evade the restrictions, including trading in rubles and making exchanges between ships in international waters.
Now, the country is using cryptocurrencies to avoid sanctions.
While large cryptocurrencies like Bitcoin have security measures in place, other forms of cryptocurrencies are difficult to trace and regulate, making them useful tools for money laundering and purchasing illegal or restricted goods.
Cryptocurrencies are not yet legal in Russia, but state-sponsored crypto mines are being introduced. These mines would monitor and legitimize Bitcoin transactions and reward investors with Bitcoin without requiring them to purchase Bitcoin initially.
Russia will also allow the use of cryptocurrency in certain transactions, all heavily monitored.
Russia will establish supervisory bodies to monitor crypto mining and transactions outside of Russia.
However, the use of cryptocurrency within Russia remains illegal for transactions only within the country.
The US has blocked the Russian Central Bank from using dollars in its transactions, a significant problem for Russia, as the dollar is still widely used for international exchange.
Cryptocurrencies offer Russia a way to circumvent some of the restrictions imposed on it following the invasion of Ukraine.