According to The New York Times, the Biden administration is imposing new sanctions on Russia in response to the ongoing Ukraine war in an attempt to cut off global funding.
Russian entities are prepared to retaliate by forming deals with any global actors willing to work together — and by leveraging digital currency to alleviate some of the worst effects.
According to the New York Times, the entities will be able to utilize digital currency to evade government controls, such as bank transfers.
“Russia has had a lot of time to think about this specific consequence,” said Michael Parker, a former federal prosecutor who now heads the anti-money laundering and sanctions practice at the Washington law firm Ferrari & Associates. “It would be naive to think that they haven’t gamed out exactly this scenario.”
This is a recurrence of a prior international conflict.
After Russia’s invasion of Crimea in 2014, the United States banned Americans from doing business with Russia, causing the Russian economy to suffer a severe blow of more than $50 billion per year.
According to the Times, there has been a tremendous increase in the bitcoin business since then.
Sanctions are usually a powerful weapon, according to the paper. It’s especially powerful for the United States because the dollar is the world’s reserve currency, utilized in payments all around the world.
However, the New York Times reports that the US is aware of the potential for cryptocurrency to mitigate the impact of sanctions and that digital assets are being scrutinized more closely.
In reaction to the global crisis, UK Prime Minister Boris Johnson has called for the “toughest sanctions” against Russia, according to PYMNTS.