ROUBLE AND TETHER TRANSACTIONS SPIKE AFTER SANCTIONS HIT RUSSIA

Thursday 03 March 2022 06:49 PM Beirut Time · 306

Wajdi Alkayal

ROUBLE AND TETHER TRANSACTIONS SPIKE AFTER SANCTIONS HIT RUSSIA

Rouble and Tether transactions have spiked considerably since the West extended its sanctions

By air, land, or sea, Russian President Vladimir Putin is hell-bent on bringing Ukraine down to its knees. Russian forces are bombing and missile-striking city centers and have already closed in on its capital Kyiv, and its second-largest city Kharkiv, and is prompting a mass exodus of refugees. For months, the Russian President has been denying its plans on attacking his neighbor but then tore up the peace deal and unleashed its forces into Ukraine’s north, east, and south borders. Security personnel and world leaders are warning Putin to stop any bombing and missile strikes, and opt for peace talks. The United States government has also issued heavy sanctions against the Russian economy, which allegedly, the oligarchs in the country will Putin evade through cryptocurrencies. Well, coming to cryptocurrencies, it is quite evident and safe to say that digital currencies are playing a massive role in this Ukraine-Russia war. Recently, after the sanctions-hit Russia, there has been a sudden spike in the Rouble and Tether transactions, as the local current tumbled to a record low level due to these Western sanctions.

As reported by Reuters, professional crypto market analysts have noticed that Rouble-denominated trades with the Tether stablecoin hit US$29.4 million, which is their highest in 2022 and around three times more than a week ago. Stablecoins are a good investment option since it is designed to avoid the wild fluctuations and volatility that revolve around Bitcoin. Their values are stable which allows users to protect funds and savings in times of economic crisis.

The Treasury Department of the United States has prohibited specifically US citizens from using cryptocurrencies to encircle Washington’s sanctions placed on the Russian economy. The rules published earlier have taken a broader turn to bolster sanctions aimed at Moscow for its invasion of Ukraine.

The United States government placed sanctions on Russia’s central bank and other state-owned and commercial financial institutions. Under the Biden administration, Americans are strictly prohibited from conducting transactions with Russia’s central banks, since its assets are frozen in the US. Now, Moscow faces extreme financial pressure from the US and its allies agreeing to limit Russia’s access to SWIFT, a global payments messaging system.

Trading between Russian Rouble and Tether spikes like never before

Prior to the spike, USDT/RUB maintained a consistent steady market with its price below 80 roubles. However, its market price surged exponentially, momentarily exceeding 90 roubles. The United States dollar-pegged stablecoin Tether witnessed a spike of over 30% in the last six to seven days against the Rouble, highlighting the immediate impact of the ongoing war on the traditional financial system.

The Russian Rouble tumbled to a record low in the volatile trade on Monday, losing a third of its value so far this year, after the West ramped up the sanctions including blocking banks from using the global payments system. Besides, the Rouble-denominated Bitcoin, whose 13-year history has been jam-packed with extreme price volatilities topped US$16 million, which is the highest in this year so far, as reported by Reuters.

Experts say that Russia may try to evade these West sanctions with the help of its oligarchs supporting the economy with cryptocurrencies. But it might be quite difficult and near impossible to achieve. Nevertheless, crypto has never witnessed so much exposure in its history as it did since Russia launched its invasion of Ukraine. Probably, Russia might not run away from this and will eventually lay down weapons and opt for peace talks soon.

Latest-news