SWIFT stands for ‘Society for Worldwide Interbank Financial Telecommunication.’ It is a cross-border payment system that allows customers all around the world to shop, send money, pay fees, and more. Now that Russia’s biggest financial institutions have been cut off from the system and the ruble has lost value, some have predicted that the country may turn to CRina or cryptocurrency as alternatives.
Russia To Turn To Crypto?
The United States placed sanctions on Russia last week in response to its invasion of Ukrainian land, but many industry experts feel that these restrictions are unlikely to be lifted, and that Vladimir Putin may turn to digital assets to circumvent the American government’s sanctions.
Sanctions similar to those imposed on Russia have previously been imposed on countries like North Korea and Venezuela, and it appears that in both cases, these countries used crypto – or attempted to use crypto – to get around the restrictions they were facing. They also used tactics like fuel transfers from ship to ship, while crypto-based moves grew more popular in both domains.
There are also theories that support a Chinese move. China, for example, is significantly involved in the development of not only its CBDC, but also a multi-CBDC platform with central banks from other nations under the auspices of the BIS. Allowing Russian users onboard makes sense in order to increase cross-border adoption of the digital yuan while also assisting Russians in reducing their reliance on the SWIFT system.
Russian Ruble Falls Following Invasion. Source: TradingView
On the other side, China may prefer to take a hands-off attitude when it comes to crypto-links with Russia in order to avoid sanctions against its own citizens and businesses. Furthermore, China’s digital yuan is still in its infancy and may not be suitable for cross-border use cases, particularly during a conflict.
Crypto investors, on the other hand, are fully aware of the link, as “China” was one of Santiment’s top ten trending phrases.
???? Awareness now appears to be at full capacity among #crypto circles. Among our top 10 trend algorithm, all 10 keywords are related to the #war. With this development, #cryptocurrencies will fluctuate at peak correlation with each piece of news. ?https://t.co/6fUEwTxtZn pic.twitter.com/SgnqRf92qq
— Santiment (@santimentfeed) February 25, 2022
Related Readings | Russia Said SWIFT Ban Could Be Tantamount To A Declaration Of War
Crypto Exchanges In Tight Position
The notion is that banks and the money they hold can be frozen or cut off in some way, but bitcoin and anything kept on the blockchain will be exempt from these restrictions. Some analysts, on the other hand, argue that this is not the case. Furthermore, if a sanctioned country’s monetary system is restricted, it will be extremely difficult for that country to convert crypto into conventional money.
Exchanges, according to Brett Harrison, president of crypto exchange FTX.US, have access to technology that allows them to track asset movement and user activity. They’d be able to detect which funds were coming from a sanctioned country, and they’d be able to halt transactions as needed. He said:
“The thing that can be prevented is the funds forever leaving an exchange where proper sanctions are properly upheld. As soon as it moves anywhere, everyone can see it because it’s on a public blockchain, but even if they could move it, no exchange will let them convert this to a currency, and the second they do, they are caught.”
Anthony Pompliano, an investment expert and commentator, was emphatic that the United States needs to invest in Bitcoin and its adoption. It wasn’t so much to replace the currency as it was to adopt Bitcoin technology ahead of “nefarious actors.”
Bitcoin has helped millions escape dictators, support dissidents, fund national defense during wartime, protect erosion of purchasing power by undisciplined central banks, & much more.
It is a neutral, liberating freedom technology.
US must get in game before nefarious actors.
— Pomp ? (@APompliano) February 27, 2022
Related Article | Russian Politicians’ Crypto Wallets Targeted By Ukraine – Hefty Reward Up For Grabs
Featured image from Getty Images, chart from TradingView.com