While news that Russia is switching to cryptocurrencies to bypass the sanctions imposed on it by Western countries is gaining wider truth levels and reaching a crescendo, the Chairman of the US Federal Reserve, Jerome Powell, had said during his testimony before the US Congress that it was high time for them to step in so they can stop sanctioned individuals and entities from using cryptocurrencies.
Introduce Cryptocurrency Regulation Now
Jerome Powell, the Chair of the Federal Reserve, had a testimonial session before the Congress’ Financial Services Committee to address the state of the US economy and, he seized the opportunity to also call for regulations to be introduced in the cryptocurrency sector. He stated that the growing ecosystem gives an opportunity for the Russian government to avoid the economic sanctions imposed on it by Western-allied countries.
In his statement, Powell said that the ongoing conflict between Russia and Ukraine emphasizes the need for Congress to take actions towards regulating digital and decentralized finance, including cryptocurrencies. He continued by saying that the US has that kind of burgeoning sector that has different parts to it, and there is not in place any form of a regulatory framework that urgently needs to be present.
The European Union decided to lockout Russian banks from the SWIFT payment platforms network as part of their financial sanctions on the country for its invasion of Ukraine. Analysts believe that all those sanctions have the potential of shrinking Russia’s economy by up to 5%, but data from crypto blockchains are suggesting that the move to cryptocurrencies was already in top gear.
The volume of transactions between the Russian ruble and USDT has been reported to reach record highs just in the past week. It is speculated that the additional 5% Bitcoin whales that just joined the blockchain since the war began could be signs of wealthy Russians who are desperately resorting to digital assets in order to protect their wealth. In some other quarters, however, there are believes that it is almost impossible to have a complete switch into cryptocurrencies due to the frequent lack of liquidity that might characterize the cryptocurrency market.
The European Central Bank’s President, Christine Lagarde, equally lent her voice to the call for regulation of cryptocurrencies with regard to the military aggression on Ukraine by Russia. Some concerned Congressmen have sent a letter to the US Treasury Secretary, Janet Yellen, requesting to know what steps the Treasury is taking in response to the Russian evasion of financial sanctions through cryptocurrencies.