Russia Sanctions Present ‘Dramatic Testing Moment’ for Crypto Exchanges
Categories: Crypto News
The sanctions placed on Russia following the Ukraine invasion present a “dramatic testing moment” for governments and the cryptocurrency industry to prevent misuse of the technology, a compliance expert said.“Geopolitically, crypto is now center stage in the conversation,” said Liat Shetret, director of regulatory affairs and compliance policy at Solidus Labs, a compliance software vendor. “That has not been the case before.” The situation thus presents “a test for crypto that’s really going to affect future growth.” Shetret said Monday in an appearance on CoinDesk TV’s “First Mover.” “It’s a dramatic testing moment.”The worry is that Russian oligarchs will try to use cryptocurrency to get around the sanctions. But the exchanges belonging to the Crypto Market Integrity Coalition, formed by Solidus and others earlier this month, stand “willing and able” to prevent such actors from cashing out their crypto, Shetret said. That said, Shetret did not sound overly concerned about Russia using crypto as an alternative to SWIFT if the West kicks Russian banks off the interbank messaging system as announced. “Crypto infrastructure is not yet as mature as we’d like it to be for it to take on the bulk of the Russian economy,” she said. Russia’s central bank digital currency (CBDC) is “not quite there” as a sanctions-evasion tool either, she said (the Bank of Russia just started testing the digital ruble this month). While cryptocurrencies are garnering support at unprecedented times, Prasad said, “they cannot in any significant way prevent a country's currency from collapsing in value relative to major reserve currencies since those values are determined in formal financial markets.”