Russia rushes to bitcoin, but Europe fights back

The war currently being played out between Russia and Ukraine affects a large part of the international world, but also cryptocurrencies, which are already strongly impacted.

The Russian invasion does not only impact Ukraine. For several days already, the whole world has been living suspended on the hypothesis of a third world war between the Kremlin and the armed forces of NATO. A war which, for the first time in history, is also being played out on the virtual front. After having multiplied cyberattacks against Ukraine, Russia must now face deep reprisals from Europe and some private groups such as Anonymous or Starlink, Elon Musk’s space company.

Crypto sanctions for Russia

We wondered recently if the Russian-Ukrainian war could kill bitcoin. The most popular cryptocurrency in the world found itself largely impacted after the first clashes, and it is clear that things are not likely to improve. To the point that the Minister of the Economy Bruno Le Maire, currently at the head of the rotating presidency of Europe announced this Wednesday: “We will make provisions on cryptocurrencies, which must not be used to circumvent the financial sanctions decided by the European Union”.

In concrete terms, Europe wants at all costs prevent Russia from circumventing financial sanctions pronounced by Europe by betting on cryptocurrencies to straighten out the Kremlin. As a reminder, seven banks in the country have already been excluded from the Swift interbank system, making international transfers theoretically impossible. On the side of the G7, the conclusions are the same. In an official statement, German Finance Minister Christian Lindner said: “We should also take steps to prevent listed individuals and institutions from turning to cryptocurrencies.”

Bitcoin booms at Putin

It must be said that since the formalization of the financial sanctions linked to the Russian invasion, the cryptocurrency market, and especially bitcoin, has been strongly disturbed. After a price crash, purchases of alternative currencies in rubles (the Russian currency) have exploded, reaching a record high, reports AFP. A safe haven for the Russian oligarchs, who hope to escape international sanctions by betting on a decentralized currency, and in theory anonymous and impossible to sanction.

For now, no concrete action has been taken by Europe. It can be expected, however, that the EU will not ask crypto platforms to limit connections from the Kremlin. While the price of the ruble has collapsed since the blocking of Central Bank assets, bitcoin stands out as one of the only viable alternatives for Russians… but not for very long.

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