Blockchain analytics firm Chainalysis unveiled a new report which showed an increase in usage of stablecoins in Russia post the country’s invasion of Ukraine since which sanctions and inflation have impacted the country, as reported by Cointelegraph.
According to Cointelegraph, the report revealed that the share of stablecoin’s transaction volume with regard to Russian services went up from 42% in January to 67% in March after the invasion, which has continued to increase. Insights from an anonymous expert on regional money laundering spoke to Chainalysis and recommended Russia’s removal from the cross-border system SWIFT. The move is expected to see cryptocurrency being utilised for cross-border transactions, with stablecoins expected to be the preferred medium of exchange due to price stability.
On the basis of information by Cointelegraph, the report made suggestions that surge in stablecoin usage can be attributed to Russia citizens trading the Ruble for stablecoins for protection of the value of their assets during high levels of inflation since the war started.
“While some of that may be due to businesses embracing cryptocurrency for international transactions, it’s also likely that some of the increase is due to ordinary Russian citizens trading for stablecoins in order to protect their assets’ value, as we discussed previously,” the report stated.
Moreover, Cointelegraph noted that Chainalysis discovered that Eastern Europe has the highest share of risky cryptocurrency activity in comparison to any other region worldwide over the previous year. The firm highlighted that riskiness around transaction involves an address associated with a risky entity such as exchanges with low Know-Your-Customer (KYC) needs. Recently, the European Union prohibited cryptocurrency payments from Russians to European wallet providers, with the aim to push cryptocurrency users towards exchanges with no KYC requirements for getting around the sanctions. Previously, Chainalysis mentioned that ransomware and cryptocurrency-oriented money laundering activity are being backed by Russian cybercriminals.
(With insights from Cointelegraph)
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