The Russian invasion of Ukraine has triggered a chain of events that, in various ways, have spotlighted cryptocurrencies.
Sanctions have put Moscow under severe economic pressure, compounded by restrictions on Russian oil and the withdrawal of many companies from the Russian market.
As a result, many Russians have struggled to move their savings or assets into cryptocurrencies.
Why? Because the ruble plunged, sanctions crippled parts of the banking system, and major payment networks such as Visa, Mastercard, and PayPal halted transactions to and from the country.
“I think we can point to 2022 as a major catalyst year for crypto because government actions effectively forced adoption,” said Ran Neuner, host of CNBC’s Crypto Trader.
Speaking to Al Jazeera, Neuner added that government measures—particularly sanctions—pushed people to look for alternatives.
He described the widespread bans and service suspensions as “kinds of absurd,” referring to decisions by Visa, Mastercard and other payment providers to stop services in Russia.
According to him, these developments will drive people to search for alternative financial systems—among them, the financial freedom cryptocurrencies can offer.
Cryptocurrency exchanges reluctant to impose blanket bans
Major crypto exchanges such as Binance, Coinbase, and Kraken have so far resisted implementing blanket bans on Russian users. But as Coinbase CEO Brian Armstrong noted last week, even these platforms might be compelled to act if legally required.
“Some ordinary Russians are using crypto as a lifeline now that their currency has collapsed. Many of them may oppose what their government is doing, and a ban would also hurt these individuals. That said, if the U.S. government decides to impose a ban, we would of course comply with the law,” Armstrong wrote.
Consequently, exchanges are screening accounts to block those that might facilitate sanctions evasion. Coinbase, for example, announced on Tuesday that it would block about 25,000 such accounts.
While that number is small compared to more than 17 million global crypto holders, coordinated bans across major platforms could still inflict significant harm on users seeking safe havens.
In 2021, a survey report indicated that cryptocurrencies were the fifth most popular investment asset class in Russia. More Russians (17%) invested in cryptocurrencies than in gold (16%) or stocks (10%).