Is Russia facing a financial meltdown? This recent ban reveals…

After many Russian banks were barred from the SWIFT system amid the Ukraine conflict, Moscow has been facing a financial meltdown.

But, since then, the general assumption was that crypto will come to the rescue of Russian individuals and businesses. But, looks like even crypto is unable to circumvent the effect of these sanctions.

Crypto crackdown

Reportedly Singapore will ban financial institutions from allowing crypto-led transactions as a loophole to the economic sanctions. In fact, the foreign ministry noted in a statement.,

“While we continue to value good relations with Russia and the Russian people, we cannot accept the Russian government’s violation of the sovereignty and territorial integrity of another sovereign state.”

And, that’s not the end of it. The media reports had confirmed that even the United States, Japan, and the European Union are looking at ways to crack down on crypto transactions in Russia. Meanwhile, the ruble has been spiraling down adding to the woes of the Russian population.

Having said that, the Japan Virtual and Crypto Assets Exchange Association (JVCEA), a self-regulatory body in the country, is reportedly discussing a ban on exchange-led transactions in Russia. JVCEA head Satoshi Hasuo, president of Tokyo-based exchange Coincheck, told a media publication,

“We’ll work with the Financial Services Agency to consider what specific measures are possible.”

As per the report, European Union finance ministers also noted that they will “further investigate actions to avoid any circumvention of the sanctions, especially by the use of crypto assets.”

Crypto businesses in line with “sanctions”

The development comes after many crypto exchanges, including Kraken, Coinbase, and Binance refused to put a blanket freeze on Russian accounts. Despite Ukraine’s direct call for a ban, even Australia’s major cryptocurrency exchanges did not pay heed as per local reports.

However, since then, there has been additional advisory by some of these crypto businesses. Binance has announced in a statement that it will also impose rules in line with the international sanctions. In order to do so, the exchange has barred cardholders of sanctioned Russian banks from using them on the platform. Furthermore, Binance has reportedly blocked access of sanctioned individuals as well.

A similar announcement has come from Circle. It noted in a release,

“To comply, Circle is temporarily disabling all fiat payments from accounts located in Russia, including card payments from cards issued in Russia. This may impact your business and we apologize for any inconvenience.”

No crypto to mitigate sanctions?

Now the question arises what will be the impact of this increasing crackdown amid a speculated increase in crypto’s demand in Russia. What is worth noting is that the Central Bank of Russia has refused to change its position on crypto to mitigate the effect of sanctions. Head of the Department of Financial Technologies of the Bank of Russia, Maria Telegina, has confirmed to local media that the central bank still supports a ban on the issuance, mining, and circulation of cryptocurrencies in Russia.