A year into Russia’s war on Ukraine, we are just starting to see how cryptocurrencies may play a role. While the cryptocurrency market is simply not big enough to provide relief to the embattled Russian state, Pro-Russian groups, including paramilitary squads such as U.S.-sanctioned Task Force Rusich, have been collecting hundreds of thousands in cryptocurrency donations since the start of the war. Stepping back, the U.S. and European allies responded to Russia’s invasion of Ukraine with an unprecedented wave of sanctions targeting Russian financial institutions and elites. A large proportion of the country’s foreign reserves have been frozen. Even Russia’s sovereign debt is now sanctioned, meaning Russia can no longer raise money from the West or trade debt on U.S. or European markets. Cryptocurrencies, despite the fact that they live and move outside the U.S. financial system, are not an effective way for the Kremlin to evade economic sanctions at scale. With a total market cap of about $1 trillion, the crypto ecosystem is not mature enough to prop up a government with mounting losses in an ever more expensive war effort.
Full opinion : Russians Using Crypto To Fund War Face An Uphill Battle.
