Officials in the U.S. would like to see cryptocurrency exchanges block sanctioned individuals regardless of where they come from.
The United States government has published new regulations banning U.S. residents from offering any support to certain Russian officials and organizations. The rules, which take effect on March 1, 2022, are a part of an ongoing global effort to sanction Russia over its invasion of Ukraine. The government has also warned cryptocurrency exchanges against facilitating Russian entities and individuals. The document stated in part:
“All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in […]deceptive or structured transactions or dealings to circumvent any United States sanctions, including through the use of digital currencies or assets or the use of physical assets.”
Causing damage to the country’s economic growth besides further isolating it
The decision to rope in cryptocurrency exchanges comes amid growing concerns that Russia could revert to using cryptocurrencies to dodge the economic sanctions. The United States and its E.U. allies have already frozen the assets of several Russian banks held overseas besides blocking them from using the SWIFT transaction network.
The economic sanctions have left Russia with little or no access to foreign exchange, and the effect could be causing damage to the country’s economic growth besides further isolating it. The additional moves by the U.S. and other nations are in retaliation to the Russian invasion of Ukraine, which saw fighting spill over in the capital Kyiv and surrounding areas.
The happenings that have followed the unfolding crisis have been a historic moment for cryptocurrency adoption besides highlighting the role crypto can play during military conflicts. Bitcoin, Ether, USDT, and other major cryptocurrencies have had the most incredible opportunity yet to show their potential in this kind of environment.
Significant not only to the world but the crypto sphere as well
While others may argue that Bitcoin’s price surge is part of BTC’s Bull Run, it’s good to note that since Russia invaded Ukraine last Thursday, there has been a spike in transactions volumes in centralized Bitcoin exchanges in Russia and Ukraine. Trade in the Russian ruble and the Ukrainian hryvnia pairs surged to their highest levels in months, according to crypto data company Kaiko. Ukraine’s move to ask for crypto donations is also a significant development in the global adoption of the asset class. According to Kaiko:
“Volume for both RUB and UAH trading pairs increased far more quickly than volume for other pairs, such as BTC-USD, which suggests the crisis is directly influencing trading behavior.”
The unfolding events highlight cryptocurrency’s fundamental value proposition in times of crisis and show why adoption will grow over time. While only time could tell the full impact of the ongoing Ukrainian crisis, all evidence points to the fact that it will be significant not only to the world but the crypto sphere as well. Pundits believe the Ukrainian crisis reveals that crypto wasn’t created to make people rich. It was designed to set them free.
Tom is a freelance writer with over 10-years’ experience in content creation, blog writing, and SEO specializing in the blockchain and cryptocurrency niche. As a philosophical figurehead, he believes that to make our world a better place, we must invest in incorruptible products and procedures, of which Bitcoin and other cryptocurrencies are leading examples.