How do digital currency activists react to Russian sanctions? Resistance or unconditional cooperation?

The governments of the United States and Europe have announced that companies and banks will no longer have the right to trade or exchange money with Russian banks. Some experts now believe that Russia may be able to circumvent sanctions by using digital currency exchanges. But the question is whether there is such a possibility, and if so, do stock exchanges and other businesses active in this field want to impose Western sanctions laws?

As Western and US economic sanctions against Russia intensify, traders are worried about the impact of these sanctions on the digital currency market, according to the Kevin Telegraph.

At present, Russia’s access to the international payment system SWIFT is largely blocked. In addition, American and Western companies cannot trade or do business with Russian banks and the National Welfare Fund; But will companies in the digital currency industry, like other Western institutions, sever ties with Russia altogether or be treated differently?

Bainance CEO: Stock markets, like banks, are subject to sanctions

How do digital currency activists react to Russian sanctions?  Resistance or unconditional cooperation?

Managers of digital currency exchanges looked at economic sanctions against Russia and their possible effects with various arguments. Changpen Zhao, CEO of Bainance Exchange, commented that most banks adhere to sanctions and that exchange offices like Bainance follow sanctions by nature.

He said:

Banks (hopefully most of them) follow sanctions. Digital currency exchanges (at least Bainance) will also work under these sanctions. However, the media speaks as if digital currency exchanges do not sanction ordinary people in Russia and do not adhere to the sanctions themselves. [ادعای رسانه‌ها دروغ است].

Earlier, in an interview with Bloomberg, he said it was “immoral” to impose sanctions on ordinary people in Russia.

Ripple CEO: Stock exchanges do not jeopardize their position to circumvent sanctions

Ripple CEO Brad Garlinghouse has criticized media outlets that say Russia is using digital currencies to circumvent economic sanctions. He spoke on Twitter about the process of creating digital currency exchanges and explained that trading platforms around the world work with different banks. As a result, if the sanctioned party or individual violates all rules and transactions on these platforms, the licenses of these exchanges will be jeopardized.

He said:

The RippleNet payment network, for example, has never worked with banks or sanctioned countries. [و از این به بعد هم کار نمی‌کند]. Ripple and its clients maintain and enforce the policies of the Foreign Investment Control Service (OFAC) and its anti-money laundering and anti-money laundering laws.

Garlinghouse says digital currency exchanges use rigorous methods to prevent such adverse events. These include strict enforcement of customer authenticity and anti-money laundering regulations.

Chief Executive Officer: Liquidity in the digital currency market is not enough for Russia

Ashish Birla, senior executive at RippleNet, said that because digital currency transactions are largely traceable to governments and software, Russia cannot use them to circumvent economic sanctions.

He tweeted on his page:

There has been talk in recent days that Russia could use digital currencies to circumvent Swift and impose sanctions. I reject these allegations for the following reasons:

1 Software and governments can track digital currencies and it is becoming easier for them.

2. There is not enough liquidity in digital currency exchanges to meet Russia’s needs. This means that the whole country of Russia needs foreign exchange reserves, not just the people present in that country.

3. Large financial institutions largely control the input and output portals of digital currencies and, as a result, these portals (exchanges) must comply with the rules of the United States Foreign Investment Control Organization.

Citing available data, Birla explained that the volume of Russian currency exchanges is about $ 50 billion a day. The total volume of bitcoin transactions per day is between 20 billion and 50 billion dollars. As a result, this digital currency does not have the capacity to meet Russia’s needs.

Explaining the chart below, he explains that from January 2022, only $ 200,000 can be placed on the Bitcoin / Ruble Bainance market each time. In addition, the Bitstamp exchange can place orders for $ 3.7 million in the bitcoin / dollar foreign exchange market and $ 2.9 million in the bitcoin / euro market. This means that the capacity of the order office on these exchanges will not be suitable for very large purchases in Russia.

How do digital currency activists react to Russian sanctions?  Resistance or unconditional cooperation?
Diagram of the capacity of the Bitcoin Stamp and Bainance exchange offices for bitcoin trading.

As a result, if an order of $ 200,000 per minute is placed on the Bitcoin / Ruble Bainance market and we assume that there is (and is not) the necessary supply and demand for transactions in this market, the total trading volume is still $ 50 billion. It doesn’t happen during the day. It is worth noting that the average daily trading volume of the pair Bitcoin / Ruble Bainance last month was only 11 million dollars.

CEO Kevin Bass: We will not boycott the Russians at the moment

How do digital currency activists react to Russian sanctions?  Resistance or unconditional cooperation?

Brian Armstrong, CEO of Kevin Base Exchange, also expressed his views. He also believes that Russia cannot circumvent sanctions by using digital currencies.

He said:

All American companies must comply with the laws of this country, and it does not matter whether these companies conduct transactions with dollars, digital currency, real estate or other non-financial assets. All companies and all individuals are obliged to follow these rules equally. We also do not think that rich Russians can circumvent sanctions by using digital currencies. Digital currencies have an open general ledger. As a result, it will be easier to track large amounts of stolen money in the digital currency market than in dollars, art, gold or other assets.

Armstrong stressed that the stock exchange does not intend to take the lead in boycotting Russian consumers; Because he believes that all ordinary people have the right to access basic financial services such as exchange offices. However, he explained that if the law forced them to boycott all active consumers in Russia, they would do so. It is worth noting that Russia is currently not on the list of supported areas of this exchange.

A Queen Base spokesman recently announced that the company would comply with all sanctions imposed, including “blocking accounts and transactions that may be related to sanctioned individuals or entities.”

The exchange stressed that it will not impose “informal rules” on unauthorized transactions and is trying to bring its activities in line with the sanctioned rules in various ways.

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