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Sudden and abrupt financial changes happened with Russia after that militarily strong country under president Vladimir Putin began attacking Ukraine beginning Russia’s war on Ukraine. Ofcourse, this unjust war was Putin’s war more than Russia’s but this war really makes things hard for Russians because Russia’s economy deteriorates as a consequence.
After Russia’s war attack on Ukraine, Russia’s fiat currency, the Russian Ruble fell with its value having fallen about 50% at the time of writing!!
Russian Ruble fell against US Dollars very abruptly because of the consequences of the Ukraine war
Russia’s economic hardships due to economic Sanctions from the Western countries
Russian Ruble’s fall was not just because of the war, but it’s because of all those economic measures the Western Countries took against Russia, with economic sanctions, expelling Russia from the Swift International payment system, freezing 630$ million foreign reserves of Russia Central Bank etc.
All these measures brought down the demand of the Russian Ruble and eventually it collapsed.
Trapped with the normal routes for financial transactions all blocked for the Russians
The Russian Citizens would find it difficult making transactions, exchanging their Ruble for some other foreign currency etc, while the Russian Government will have a hard time having a trade relationship with other countries as they can’t use the Russian Ruble for trade transactions, nor can they have financial dealings with the major foreign banks in the SWIFT network for them to exchange their currency or sell their other foreign securities.
The sad aspect about all this is that the Russian common man suffers, nothing new, we all suffer because of the policy errors of our Government authorities, which is why we aspire to be insulated from Government control by being in crypto. Hard times all this, anyway…
CEX were open so Russian Citizens were free to convert their Ruble to BTC
Fortunately, as far as I am aware, centralised crypto exchanges(CEX) remained open to trade for Russians, so Russians were free to use BINANCE exchange and exchange their Ruble to BTC and tether, the stable coin that’s pegged to the US dollars. This was necessary for them to do, to hedge against devaluation of their Ruble currency.
As you can see BTC is hot against Ruble in Binance Exhange. Chart from https://www.tradingview.com/
Good that Binance and Kraken CEOs made it clear they won’t prevent ordinary Russians from trading in crypto because that would be unfair, at times like this everyone has the right to protect their wealth through getting access to BTC, although I am aware that our Binance CEO, CZ, said he would comply with sanction protocols and block crypto addresses of individuals who are sanctioned by Governments in his exchange. Right cool!!
So, it's good that Russians were able to easily get their hands on BTC to hedge against Russian Ruble.
Other Financial troubles for Russia besides the shredding of value of Ruble
Russian Government, I read a week back, increased interest rates to 20%, as a measure to encourage Ruble deposits in banks. This monetary measure was done to counter the effects of the fall of the Ruble. Unfortunately, the cost of borrowing becomes damn costly, so businesses will definitely be negatively effectively.
Also, there is high inflation in Russia, partly because of printing to finance the Russian war efforts, of course there is something interesting here that Ukraine is getting easy crypto funding through global donations for war, while Russia will have a hard time with their financing with Ruble’s value so deteriorated, plus the bank accounts and crypto addresses of Russia’s powerful and wealthy oligarchs frozen.
Russia maybe able to survive the sanctions using the Chinese international payment network
Still, Russia has ways to exchange their Ruble through its Chinese connections, as China has an alternate international payment network. I am not that clear about the details but by using that network, Russian banks can exchange their Ruble for other foreign assets, mostly Chinese digital yuan I guess and stay afloat.
This may make the Chinese currency strong and rival the US dollars who knows?.
US Dollars is getting weak these days as the World Reserve Currency’s value is getting eroded due to inflation. Anyway.
The major point of distinction of Bitcoin from other World fiat currencies
However, notice this data from CoinmarketCap on how Bitcoin fares compared to the World’s largest fiat currencies, the odd currency listed here has got to be Bitcoin on the 14th rank because all other currencies have unlimited supply except for Bitcoin and BNB where BTC’s supply is limited to 21,000,000 BTC.
This is why BTC is considered hard money and people want it to hedge against weak fiat currencies whose value gets diluted as they have unlimited supply.
See BTC is a hard currency with limited supply, so its valuable digital currency and of late its market cap increased to crashed Ruble.
Well, BTC has become a more valuable currency than Ruble as that digital currency has more market capitalization than the Russian Ruble. All this has happened after Ruble’s fall out because of the War.
Crypto community peacefully supported Ukraine through crypto donations
Well call me biased, but in all this Russia’s war on Ukraine, there was so much suffering, chaos and violence, but the crypto community mostly stood for peace with their overwhelming donations to Ukraine. We did not want this war, but it started so it’s good the crypto community sided to help Ukraine with their support, hoping that Ukraine does not fall off to Russia’s aggression.
What’s interesting here is that global donations to Ukraine were made possible through crypto transfers, which is pretty cool.
Thank you for reading, have a great day.
