Russian Bank SWIFT Ejection Causes Chaos, Crypto Usage Spikes
USD/RUB price chart: TradingView
The Russian Rouble experienced a freefall following the sanctions, now worth less than 1 cent. The consensus is the “financial nuclear weapon” that is the banning of Russia from the SWIFT network will set Russia’s economy back by generations.
In response, Moscow has initiated several financial measures to soften the blow, including raising interest rates to 20% and preventing the Moscow Stock Exchange from opening for five days. Russia has also announced that it will not let assets be sold overseas, which will only deal more damage over the long run. Analysts believe that these steps will do little to stem the hemorrhage of Russian markets.
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Russian citizens are taking to crypto platforms to avoid the effects of the sanctions, though this may not last long. Ukraine’s Vice Prime Minister Mykhailo Federov asked crypto exchanges to block Russian users to ensure that the sanctions have maximum impact. The request resulted in an ambivalent response from the crypto community, and Kraken CEO Jesse Powell went so far as to say it would not be possible without a legal requirement.
1/6 I understand the rationale for this request but, despite my deep respect for the Ukrainian people, @krakenfx cannot freeze the accounts of our Russian clients without a legal requirement to do so.
Russians should be aware that such a requirement could be imminent. #NYKNYC https://t.co/bMRrJzgF8N
Others have complied with Fedorov’s request, with DM Market announcing that it would freeze the account of users from Russia and Belarus. However, the most significant of these platforms to block Russian users are Binance. The exchange said it would block only those targeted by sanctions.
Ukraine, meanwhile, has been receiving a sizable amount of donations via cryptocurrencies. Officials have advertised bitcoin and ethereum addresses to which donations can be sent, and they have been coming in fast. The country has verified that it has received over $13 million in crypto donations, while Ukrainians are trading crypto hurriedly amid the chaos.
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