According to Moody’s, Russia’s capacity to use cryptocurrency to avoid international sanctions is hampered by the crypto market’s small size. Despite increasing use in minor transactions, poor liquidity is another barrier to Russians using bitcoin and related services.
According to Moody’s report, crypto assets are not a viable option for approved Russia.
Western sanctions placed on Russia for its invasion of Ukraine have generated concerns about whether the Russian people and governments may utilise cryptocurrencies to avoid restrictions and undertake financial operations, according to research issued this week by Moody’s Investors Service.
The agency’s bond credit rating division emphasises the recent growth in the amount of modest transactions done by Russians. However, the authors warn out that, despite their anonymity, crypto assets are not as effective in avoiding financial fines. they maintain:
Given the small scale and poor liquidity of the ruble-to-crypto market, we believe that crypto assets are unlikely to provide a feasible and efficient alternative for people seeking to avoid sanctions for the time being.
Moody’s also mentioned that authorities in Moscow have stated that Russia may accept bitcoin payments for its oil and gas exports. However, analysts think that the present market size and lack of liquidity would make this alternative susceptible as well.
Furthermore, crypto platforms are frequently required to comply with anti-money laundering and know your customer standards, and they frequently conduct onboarding checks. “Blacklisted accounts will be identified and disabled,” experts predict, citing a centralised digital asset venue with well-established screening and compliance onboarding procedures.
While bad actors’ illicit actions on centralised crypto exchanges or unregulated digital asset platforms may not go unnoticed and unreported to authorities, such activities are not yet so widespread that sanctioned nations like the Russian Federation should be convinced by Moody’s.