Similar to the President of the ECB, Hillary Clinton believes that the Russians can use cryptocurrency to get around financial sanctions.
The former US presidential candidate has criticized digital fund asset trading platforms that refuse to stop serving Russian users. She once again emphasized that digital assets should be placed under a regulatory framework.
Cryptocurrencies should not be the way out for Russia
In the midst of the Russian invasion, Mykhailo Fedorov, Deputy Prime Minister of Ukraine, asked leading digital asset platforms to freeze all addresses blockchain of the Russian users. According to this politician, this move will weaken Russia and support Ukraine's defense.
In a recent interview for MSNBC, former first lady Hillary Clinton said she is “disappointed” that some exchanges are still offering services to Russian users:
“I was very disappointed to see some exchanges cryptocurrency, not all, but some of them are refusing to block trade with Russia because of some philosophy of libertarianism or whatever."
In her view, people should do "as much as possible" to isolate Russia's economic activity.
“That pressure will absolutely work on Putin. I think the Treasury, I think the Europeans should look at how they can stop the crypto market from giving Russia an exit.”
Among the exchanges that still serve Russian-based traders are Binance, Coinbse and Kraken. The organizations argued that most of those users were opposed to the war and that freezing their accounts would be against the cryptocurrency industry's perception.
Experts say that's not possible
Crypto policy experts say that concerns raised by prominent politicians about Russia evading economic sanctions using cryptocurrencies are “completely unfounded.”
They say that the cryptocurrency market is not nearly large enough nor deep enough to support the volume that Russia needs and that the country's digital asset infrastructure is very small.
Russia has been cut off from the SWIFT cross-border trading system and businesses in the US and other Western countries forbidden doing business or dealing with Russian banks and sovereign wealth funds.
Head of Policy at cryptocurrency policy promotion agency Blockchain Association in the United States, Jake Chervinsky, posted a theme Long on Twitter on March 2, explaining how “Russia cannot and will not use cryptocurrencies to evade sanctions.”
Chervinsky cited three reasons why Russia is unlikely to use cryptocurrency to bypass US sanctions.
- The first is that sanctions are not limited to USD, and it is now illegal for any US business or citizen to do business with Russia. He said, “It doesn't matter if they use dollars, gold, seashells or Bitcoin.”
- The second reason is that the financial needs of a country like Russia far exceed the current capacity of the cryptocurrency market, which Chervinsky calls “too small, expensive, and transparent to be useful to the Russian economy.” ". In other words, even if Russia could access enough liquidity, it would still be unable to hide its transactions in such a market.
- In the end, the country spent years trying but was unable to build any meaningful crypto infrastructure or even perfect cryptocurrency regulations. Chervinsky said that cryptocurrency does not appear to be part of the plan to mitigate the impact of Russian sanctions.
Other experts argue that Russia's case differs from sanctions evasion and wealth hiding by North Korea, Venezuela, and Iran because of the size of sanctions, slow cryptocurrency adoption, and lack of direction. depth of the market.