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Will Sanctions Hinder or Trigger Bitcoin Adoption in Russia

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As the conflict in Ukraine toughens, the Russians have been subjected to economic penalties imposed by countries throughout the world as a result of increasing tensions.

These sanctions included, among other things, disconnecting Russian banks from the SWIFT system, freezing the assets of Russian officials and banks, and limiting the country’s capacity to transact in foreign currencies.

There has been a surge in the movement of Russian cash into digital assets, fueling speculation that Russians may simply resort to Bitcoin (BTC) and other cryptocurrencies to evade sanctions.

The reality, on the other hand, may not be as simple as the rumor suggests. In truth, there are three key hurdles that must be addressed in order to move significant sums of money as required.

1. Liquidity Issues

In order to evade sanctions at scale, billions would be invested in Bitcoin and other ”crypto” it would possibly make it an ineffective tool to make those levels of purchases. Especially, following the sanctions and data collected through the largest exchanges with Know Your Customer laws and regulation. It could be done, would be difficult based on the level of sanctions they face and quantities they would need to purchase.

2. Russian Billionaires Using Bitcoin and Crypto to Maintain Anonymity

While Bitcoin is pseudonymous, law enforcement and governments all have the same access and ability to monitor the public-open ledger. While transactions could not be stopped, their activity could and would be tracked.

3. Exchanges Cautious and Face Regulatory Scrutiny

Due to stiff regulations for exchanges in regards to anti-money laundering laws, they would need to be accessed in order to make over-the-counter purchases and have the supply to meet those purchases, but they are not going to risk their company on sanctioned Russians seeking to evade these sanctions.

Citizens Suffering From Financial Tyranny Can Seek Refuge in Bitcoin

While Russia is in a good spot, holding 12% of the global ”crypto” market cap, the ability for them to evade sanctions is there, there’s just a few obstacles for one of the world’s most powerful nations. Russia has more natural resource reserves than any other nation amid skyrocketing commodities. We are entering a new era in geo-political game theory and Bitcoin.

Will the Russians try to move Bitcoin privately despite these obstacles? Will the people form their own peer-to-peer economy? It is possible, and with millions of Russian citizens seeking a place to store their value and protect themselves from the whims of the politics of the day, Bitcoin is where they and anyone in the world can seek refuge from the state.

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