Since the bottom of both cryptocurrencies in June 2022, ether has vastly outpaced bitcoin. The greater gains in Ether have occurred as investors anticipate “the merge,” a major update to the Ethereum blockchain.
Russia is considering accepting Bitcoin as payment for its oil and gas exports, according to a high-ranking politician.
According to Pavel Zavalny, “friendly” countries may be allowed to make payments in cryptocurrency or local currency. Russian President Vladimir Putin stated earlier this week that “unfriendly” countries should pay for their gas in rubbles. The action is believed to be intended to support the Russian ruble, which has lost more than 20% of its value this year.
Sanctions imposed by the United Kingdom, the United States, and the European Union in response to Ukraine’s invasion have strained Russia’s finances and increased its cost of living.
Mr Zavalny, chairman of Russia’s State Duma’s energy committee, stated on Thursday that the country is looking into alternative methods of payment for energy exports.
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China and Turkey were mentioned as “friendly” countries that were “not involved in the sanctions pressure.”
“We have long proposed to China that we transition to rouble and yuan settlements in national currencies,” Mr Zavalny added. “With Turkey, it will be lira and roubles.”
“You can even exchange bitcoins,” Mr Zavalny added.
According to a Treasury official, Russian President Vladimir Putin may utilize cryptocurrencies to circumvent US and other sanctions placed on the Kremlin for its unlawful invasion of Ukraine.
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The Senate Committee on Banking, Housing, and Urban Affairs held the hearing to discuss the next steps to prevent Russia’s ongoing aggression against Ukraine, such as the seizure of assets from Russian oligarchs and the G-7 request to cap the price of Russian oil.
Since Russia invaded Ukraine in February, Warren has been concerned about the possibility of Russian elites utilizing cryptocurrencies to avoid sanctions.
High-ranking officials are worried that Russia’s wealthiest would evade economic sanctions by transferring their cash to cryptocurrency. Senator Elizabeth Warren, a Democrat from Massachusetts, has filed legislation in Congress to prevent Russian cryptocurrency transactions.
The measure does not intend to outlaw all bitcoin transactions in Russia. It would, however, give the US government the authority to prohibit US companies from processing cryptocurrency transactions involving sanctioned Russian accounts, as well as impose secondary sanctions on foreign cryptocurrency exchanges that do business with sanctioned Russian individuals, businesses, or government agencies.
The measure does not intend to outlaw all bitcoin transactions in Russia. It would, however, give the US government the authority to prohibit US companies from processing cryptocurrency transactions involving sanctioned Russian accounts and impose secondary sanctions on foreign cryptocurrency exchanges that do business with sanctioned Russian individuals, businesses, or government agencies.
Despite signs that Russian cryptocurrency transactions have surged in both number and value in the last month, the scale of the increase suggests that buyers are ordinary Russians wanting to secure their money as the ruble decreases in value.
Economic sanctions imposed on Russia as a result of its invasion of Ukraine are clearly damaging the Russian economy as a whole. Their intended goal, on the other hand, is to punish Putin and the affluent oligarchs who defend his regime the most.
A crucial component of this strategy is to prevent these people from spending or relocating their money by freezing assets kept abroad and prohibiting financial transactions.
However, the continued operation of Russian cryptocurrency exchanges such as Binance, Yobit, and Local Bitcoins has long alarmed US officials. Even before Russia’s latest invasion of Ukraine, the US Treasury warned that cryptocurrencies might undercut sanctions imposed on Russia for its 2014 annexation of Crimea.
The Treasury Department has already identified Russian corporations utilizing cryptocurrencies to circumvent sanctions. Russia accused 22 individuals and two companies, including a neo-Nazi paramilitary group, this month for supporting Russia in digitally financing its war against Ukraine.
For the first time, the agency, along with oligarch Konstantin Malofeyev, privately owned commercial bank Public Joint Stock Company Transkapitalbank, and 40 other individuals and companies led by Malofeyev, targeted a virtual currency mining agency in April.
That same month, the Russian Darknet Market Hydra and Garantex, a virtual currency exchange, were both sanctioned, presumably to plug loopholes for potential sanctions evasion.
The authorities in the United States limited access to all of their assets domiciled in the United States or held by someone residing in the United States. Transactions between sanctioned individuals and anyone in the United States were also restricted by Treasury.
Russia, on the other hand, planned ahead of time, creating its own digital currency in February with the intention of trading directly with countries that will take the funds without first converting them to dollars. Because crypto trades can be tracked on the underlying blockchain, the country devised techniques to conceal the origin of transactions.
Rosenberg confirmed that technology that increases anonymity and other measures used to conceal digital transactions can impede sanctions enforcement. Treasury placed the first-ever sanctions on these “mixers” in May, and another, “Tornado Cash,” was sanctioned in August.
Coinbase, a big cryptocurrency trading platform in the United States, filed a lawsuit against the Treasury Department this month on behalf of Tornado Cash customers, according to Warren.
According to Coinbase’s chief legal officer, Paul Grewal, the fines set a “hazardous precedent,” but Rosenberg praised them as effective.
“When they can serve as a deterrent to any criminal (who) would seek to use a mixer in order to launder their funds, the proceeds of corruption or any criminal activity, that’s an effective avenue that we can use in order to signal that we cannot tolerate money laundering,” Rosenberg said.
