Binance founder Claims Russia cannot use Cryptocurrency to Evade Sanctions

Binance founder, Changpeng Zhao, stated that cryptocurrency would not be a viable option for Russia to use to evade economic sanctions. Following the attack on Ukraine, western governments almost unanimously agreed to sanction Russia by cutting it off of global economic systems. In light of these sanctions, some investors theorized that Russia would stock up on cryptocurrencies to lighten the effect of their sanctions as the coins are decentralized.

However, Zhao dismissed this idea, stating that “crypto is too small for Russia.” Zhao added that cryptocurrencies cannot be used to evade sanctions as they are too traceable and that more focus should be placed on banks.

“Another reason Russia would not want to use crypto is that it is too traceable. And governments around the world are already very adept at tracking it,” said Zhao.

“Currently, the media and politicians are spending a lot of effort and focus on crypto and sanctions,” he said.

“The truth is, crypto is too small for Russia. If we look at the crypto adoption today, there is probably about 3% of the global population with some kind of crypto exposure (ie, owning some crypto). Of those, most only have a small percentage of their net worth in crypto. Less than 10% on average. So, there is probably only less than 0.3% of the global net worth in crypto today. This percentage applies equally to Russia.”

According to the Wall Street Journal, the United States has considered imposing sanctions on Russia’s crypto market.

Furthermore, Zhao claims that using privacy-focused digital currencies such as Monero would be ineffective as the market capitalization of these coins is minuscule when compared to Russia’s GDP. (Monero’s market capitalization is $3 billion while Russia’s GDP is about $1.5 trillion)

Source: The Guardian