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Rouble and Tether reach a new high with Western sanctions hitting the Russian economy.
It is evident that Russian President Vladimir Putin is hell-bent on bringing Ukraine to its knees. The Russian army has already closed Kyiv and Kharkiv the second largest city after Kyiv and is resorting to relentless bombing and missile attacks. Though it has been denying to acknowledge its ruthless efforts to invade its neighbor, evidence is all over, with most parts of Ukraine under constant war tension. To prevent the Russian oligarchs evade from the country, the US has imposed sanctions on Russia. However, the strategy is not working the way it is supposed to. The reason – newfound means of income in Cryptocurrencies. Apparently, it is playing a massive role in the Russia-Ukraine war. As the Russian currency Ruble hit a record low due to US sanctions, Rouble and tether transactions, have seen a significant spike.
According to Reuters, Ruble-denominated trades in cryptocurrencies have spiked with Tether stable coin hitting US$29.4 million, which is the highest in 2022. Thus, these movements clearly indicate that stable coins are immune to fluctuations and volatility of the crypto market and are a good investment option. As they have a stable value, they allow users to sail through difficult times such as during war crises with ample savings.
US government imposed financial sanctions on the Russian central bank and other state-owned and commercial financial institutions. Biden government has frozen Russian assets in the US to strictly prohibit Americans from conducting transactions in Russian currency. Moscow is now under extreme financial pressure from the US and its allies which agreed on limiting Russia’s access to SWIFT, a global payment system.
Trading in Rouble and Tether spike 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 in Ukraine. Probably, Russia might not run away from this and will eventually lay down weapons and opt for peace talks soon.