According to a new report from blockchain intelligence firm Chainalysis, Russia has seen an increase in the use of stablecoins following Russia’s invasion of Ukraine, which has faced Western sanctions and Rising inflation affects the country, according to a new report from blockchain intelligence firm Chainalysis. Released on October 12, the report revealed that the share of stablecoins trading volume on major Russian services increased from 42% in January to 67% in March after the invasion and subsequent invasion. continued to increase since then. Chainalysis also pointed out that the cryptocurrency may have helped finance foreign trade for Russia after it was dropped from SWIFT.
An unnamed expert on money laundering in the region suggestions Share that Russia’s removal of the SWIFT cross-border system will likely see cryptocurrencies used for cross-border transactions, with stablecoins possibly being the preferred medium of exchange due to their price stability. .
The report also suggests that some of the increase in stablecoin usage can be attributed to ordinary Russian citizens trading RUB for stablecoins to protect the value of their assets, amid high inflation since the war began.
“While some of that may be due to businesses using cryptocurrencies for international transactions, it is also likely that some of the increase is due to ordinary Russian citizens trading stablecoins for protection. their net worth, as we discussed before,” the report notes.
Meanwhile, Chainalysis also noted that crypto activity identified as “high risk” is more prevalent in Eastern Europe than in any other region, amid the Russo-Ukrainian war.
Eastern Europe is the fifth largest crypto market in the region, according to Chainalysis, with $630.90 billion (about 51,93,900 crore) in value received on-chain between July 2021 and June 2022. That represents 10% of global trading activity during the period studied, which is relatively consistent with past performances.
Around 18% of crypto activity in Eastern Europe is associated with “risky or illegal” activity, according to the report, representing the highest proportion of any region as measured by Chainalysis. However, it mainly comes from transactions that are considered risky with the bloc’s illegal transaction rates lower than sub-Saharan Africa and Latin America and on par with North America.
An important driver of the region’s high rate of risky activity is the prevalence of “high-risk exchanges,” which have little or no know-your-customer (KYC) standards. The report says such exchanges account for about 6% of active transactions in the region, compared with 1.2 percent for the nearest region.
In Russia, Eastern Europe’s largest country, sanctions in response to the Ukraine invasion are restricting citizens’ access to many international crypto services and could push them to riskier services. The EU further tightens restrictions about Russian crypto exchanges last week, banning all crypto-asset wallets, accounts or custodial services from the country.
