Despite the strengthening of sanctions, Russian investors appear to be continuing to transact in Bitcoin and other crypto currencies. Despite the fact that overall flows appear to be small, data from blockchain analytics firm Kaiko showed that on Saturday, the volume of ruble-denominated Bitcoin trade reached its highest level of the year. Meanwhile, the Tether stablecoin, which purports to be backed one-to-one with fiat, appears to be handling the majority of the ruble-denominated crypto trade volume.
According to Kaiko, Bitcoin trading pairs denominated in rubles grew by "magnitude" on March 5. On February 24, when Russia invaded Ukraine, the average trading size of Bitcoin ruble transactions on Binance reached a 10-month high of $580 (approximately Rs. 44,500).
Andrew Tu, business development manager at crypto algorithmic trading startup Efficient Frontier, speculated, "Perhaps more Russian retail investors are seeking to get out of fiat totally in favour of BTC." "While it's unlikely that true US dollar limitations will be imposed on USDT holders, I think some individuals are simply being cautious."
Russia's Bitcoin trading accounts for a small percentage of the overall volume of Bitcoins traded worldwide. The daily trading volume of Bitcoin ranges between $20 billion to $40 billion (roughly between Rs. 153.64 crore to Rs. 307.28 crore). According to Kaiko, the entire trading volume of BTC/RUB on March 5 was around $14.2 million (approximately Rs. 109.08 crore).
According to Kaiko's March 7 newsletter, three worldwide crypto exchanges, Binance, Yobit, and LocalBitcoins, allow ruble-denominated crypto trading pairs. Andrew Tu, business development manager at crypto algorithmic trading firm Efficient Frontier, theorized that "maybe more Russian retail investors are seeking to get out of fiat totally in favour of BTC." "While it's unlikely that true US dollar limitations would be imposed on USDT holders, I believe some people are simply taking extra precautions." For example, Coinbase reported blocking over 25,000 addresses linked to the sanction list.
Caroline Bowler, CEO of BTC Markets in Australia, claimed her organisation is barring Russian entities that are subject to sanctions. At the same time, there has been an upsurge in trading by those linked to Russia.
In a Bloomberg Television interview, she remarked, "this increase in Bitcoin in especially relates to retail, who are out there aggressively buying in tiny sums." The moves to block crypto as a sanction workaround come after the US and its allies imposed extensive sanctions on Russia, including a measure to restrict some banks from using the SWIFT messaging system, which connects financial institutions all over the world. The steps also highlight the critical role that digital assets are playing in a conflict that is putting the world's security at risk. On March 4, Paolo Ardoino, the chief technology officer of USDT issuer Tether, claimed on Twitter that USDT "needs to comply with regulations of central authorities" as a centralised stablecoin.