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March 15, 2022

Cryptocurrency Volumes in Russia Have Dropped

Binance prohibited Visa and Mastercard cards issued in Russia, causing cryptocurrency trade volumes to plummet. While Russian citizens still have access to cryptocurrency exchanges, sanctions on traditional payment channels appear to be limiting their capacity to trade.

While most crypto exchanges oppose blanket bans on Russian consumers, many have ceased taking payments from sanctioned banks and businesses, limiting Russians’ access to cryptocurrency. People are also afraid about putting their wealth in bitcoin for fear of losing access.

Visa, Mastercard, and American Express have all halted operations in Russia, citing US sanctions as the reason. The majority of foreign banks have likewise stopped doing business in the country.

According to data from digital asset analytics source Kaiko, ruble-denominated Bitcoin and Tether trade volumes have slowly decreased since Binance’s decision last week, and are now at levels observed prior to Russia’s invasion of Ukraine.

A discrepancy between ruble and hyrvnia-denominated crypto trading was also highlighted by Kaiko. Following the invasion, BTC-UAH buying soared, showing that traders in Ukraine were flocking to cryptocurrency in the face of financial turmoil.

Trading volumes in Ukraine have remained high, with Tether in particular showing strong demand. As the hyrvnia plummeted, citizens were spotted paying up to a 20% premium for the stablecoin.

However, it was only after the application of sanctions, notably the exclusion of Russian institutions from the SWIFT network, that BTC-RUB volumes began to rise. Sanctions imposed by the West on Moscow are the toughest they’ve ever been, virtually cutting Russia off from major global financial markets.

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The United States recently imposed a ban on Russian oil imports, and Europe is considering doing the same. This would further upset the Russian economy, given that oil is its major export.

The Russian ruble has recovered from record lows against Bitcoin thanks to lower BTC-RUB trading activity. One Bitcoin is now worth roughly 4.6 million rubles, down somewhat from last week’s peg of over 5 million rubles.

In currency markets, the ruble is still under a lot of pressure. It is now trading at near-record lows against the dollar and the euro.