Ordinary Russians are utilizing cryptocurrencies as a rescue now that their own currency, the Ruble, has fallen, according to the CEO of the Nasdaq-listed crypto exchange Coinbase. The CEO also does not believe that Russian oligarchs would use crypto to circumvent sanctions.
For ordinary Russians, cryptocurrency has become a lifeline:
As Russia continues to wage war on Ukraine, Coinbase CEO Brian Armstrong revealed his thoughts on crypto use and his exchange’s policies in a series of tweets on Friday.
First and foremost, he stated that Coinbase does not “preemptively bar all Russians” from utilizing its network. “Unless the law states differently,” he said, “We think everyone deserves access to fundamental financial services.”
The debate about barring all Russians began when Ukraine’s vice prime minister requested that all major bitcoin exchanges block all Russian users’ addresses. “It’s vital to freeze not just addresses associated with Russian and Belarusian authorities, but also to undermine regular people,” he tweeted on Feb. 27.
Several major crypto exchanges, including Coinbase, Binance, and Kraken, promptly declined the request.
After several nations agreed to impose punitive penalties on Russian firms, the currency fell by more than 30% this week. On Thursday, Moody’s Investors Service downgraded Russia’s long-term debt rating from investment grade (Baa3) to junk (B3), a six-notch reduction.
Stocks of Russian firms listed on the London Stock Exchange have plunged while the Russian stock exchange has remained closed. Trading in 27 Russian-linked firms has been halted on the London Shares Exchange, including Russia’s largest bank, Sberbank, whose stock has plunged 99.72 per cent since the start of the year.
To Avoid Sanctions, Coinbase Recommends Using Crypto:
When it comes to sanctions, the CEO of Coinbase stressed that every firm in the United States is required to respect sanctions regulations. “Of course, we will obey those regulations if the US government decides to impose a ban,” he said.
“This is why, like any other regulated financial services firm, we screen persons who sign up for our services against worldwide watchlists and prohibit transactions from IP addresses that potentially belong to sanctioned individuals or companies,” Armstrong explained.
The executive, however, added: We don’t believe that Russian oligarchs will use crypto to circumvent sanctions. Attempting to smuggle large sums of money using crypto would be more traceable than using US dollars, art, gold, or other valuables since it is an open ledger.
Armstrong explained that he isn’t alone in his belief that bitcoin is an inefficient means for Russia to circumvent sanctions.
According to him, Carol House, the National Security Council’s head of cybersecurity, made a similar comment on Wednesday. She stated that the size required for the Russian state to successfully defy all financial restrictions imposed by the US and its allies would probably render cryptocurrencies ineffectual as a key instrument for the state.