According to analysts of the international rating agency Moody's, cryptocurrencies are not an effective solution for Russia to circumvent sanctions, Investment Executive has reported referring to a report by the company's experts.
According to them, the imposition of international sanctions on Russia as a result of its military operations in Ukraine has raised the question of whether cryptos can be used to circumvent the restrictions and "restore the ability of citizens and the government to at least partially conduct financial transactions."
Moody's has reported that Russian citizens have recently started turning to cryptocurrencies for small transactions more frequently, and the authorities have proposed allowing Russian companies to pay for export and import transactions in digital currencies.
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The company analysts have highlighted:
"Given the ruble-to-crypto market’s limited size and low liquidity, we believe that, for now, crypto assets are unlikely to provide a viable and efficient solution for individuals to circumvent sanctions."
Some of the barriers mentioned by agency experts include the introduction of KYC/AML procedures by many cryptocurrency exchanges:
"A centralized digital asset venue with well-established screening and compliant onboarding processes would be able to flag and disable blacklisted accounts."