Countries subject to US sanctions including Iran and North Korea have used similar measures. Russia could further embrace cryptocurrencies as the country is hit with Western sanctions, analysts say.
NurPhoto via Getty Images A map shows the Ukrainian cities currently under siege by Russian forces. One week later, Putin appeared to be less sure, pointing that Russia had advantages in cryptocurrency mining due to its huge energy wealth and expertise in the field.
The same group have also announced that unnamed Russian banks will be expelled from Swift, the main global payments messaging system used by banks to make cross-border money transfers.
Russia and its banks could be looking at cryptocurrencies more closely because they could represent an alternative medium of international exchange to the dollar. Cryptocurrencies could also bypass the international banking system that is key to enforcing sanctions as a listening post for financial transactions worldwide a characteristic of cryptocurrencies that watchdogs and central banks dislikeby offering an alternative way to make irreversible cross-border transactions.
Other crypto experts argue, however, that the transparent nature of blockchains makes it difficult for sanctioned entities to use cryptocurrencies to bypass sanctions.
Nonetheless, some nation states have turned to bitcoin for an escape.
A support engineer tends to server room equipment at the cryptocurrency mining company, BitRiver, in Bratsk, Russia on January 14, Experts in money laundering on Friday said that it would not be realistic for Russia to switch to cryptocurrencies on a large scale to move money across borders, even if it might work for smuggling small amounts into or out of the country. Russia-Ukraine conflict impacts U.
Advertisement Before the war broke out, Ukraine was already well placed to raise funds in this way. Last month, its parliament officially legalised cryptocurrency, although it stopped short of adopting any as legal tender, as El Salvador has done. Dmytro, a computer programmer from Lviv who works for a cryptocurrency mining company and asked that his surname be withheld for security reasons, told New Scientist that he had managed to escape the fighting in Ukraine thanks to bitcoin.
Putin speaking in South Korea How Much Bitcoin Does Russia Own? Crypto Could Impact Sanctions How much Bitcoin does Russia own?
He woke on 24 February to news of the invasion and found cash machine payouts limited by emergency laws, and huge queues to withdraw money. International bank transfers had also been banned. He managed to transfer all his available money into bitcoin and escape with his girlfriend over the border to Poland.