The Ukraine war has accelerated cryptocurrecny adoption in Russia and Ukraine
Russia is evading Western sanctions with the use of cryptocurrency. Some crypto exchanges have refused to disconnect all Russian users from their services.
“We at the FSB are monitoring the situation, the conflict situation relative to cryptos,”Patrick Armstrong, a member of the Financial Stability Board’s (FSB) secretariat, told a City & Financial conference in London.
The European Union brought cryptocurrency under their list of sanctionable financial tools on March 9, according to Reuters. Crypto will now fall under anti-money laundering and terrorist financing laws.
90% of crypto firms withdrew their applications or were refused for failure to meet the anti-money laundering standards, according to David Raw, a policy official at Britain’s Financial Conduct Authority.
The UK imposed an end of March deadline for all companies with crypto-related activity.
Zelenskyy Signs Crypto Regulation Bill
Ukraine’s President, Volodymyr Zelenskyy, signed the “On Virtual Assets” bill, according to a March 16 announcement. Ukraine’s Ministry of Digital Transformation made the announcement.
The Ukraine government requires crypto exchanges, and all firms dealing in digital assets, to register with the government in order to operate legally. Ukraine’s National Securities and Stock Market Commission will handle oversight for the country’s digital assets policies.
“The signing of this law by the president is another important step towards bringing the crypto sector out of the shadows and launching a legal market for virtual assets in Ukraine,”Ministry of Digital Transformation
Aid for Ukraine has received more than $48 million in crypto. Aid for Ukraine is a crypto donation platform that has partnered with FTX, Kuna, and Everstake, “To support people in their fight for freedom”.
The platform accepts donations in Bitcoin (BTC), Ether (ETH), Tether (USDT), Polkadot (DOT), Solana (SOL), Dogecoin (DOGE), Monero (XMR), Icon (ICX), and Neo (NEO).
Russia Backtracks Stance on Crypto
In 2021, Russia sought to ban cryptocurrency outright. The central bank claimed they were a “threat to financial stability”. However, after Sberbank (Russia’s largest lender) lost more than 95% of its value following Russia’s invasion of Ukraine, Russia changed its mind. JPMorgan, other major investment banks, and asset managers have also left the country.
Russia has since changed its stance on crypto and issued a license to Sberbank to allow the firm to issue digital assets. Sberbank said this would allow Russian firms to “invest their currently idle funds to generate income.”
Sbercoin is now prepared to launch after failed attempts since 2020, according to fortune.com
Sberbank says their digital assets platform will allow companies to:
- issue their own DFAs proving the cash requirements, which will enable them to attract market investments
- acquire DFAs issued through the Sber information system, which will position them to invest their currently idle funds to generate income
- make other DFA transactions in accordance with Russian laws
“Companies will be able to make their first transaction on our blockchain platform one month from now. We are just starting our work with digital assets, realizing that further development requires adaptation of the current regulatory framework. To do that, we are ready to work closely with the regulator and executive bodies.”Sergey Popov, director of the Transaction Business Division, Sberbank
Russia and China are also cooperating to form a new international cryptocurrency.