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Russia Sanctions Could Drive More People To Crypto, Analysts Say - Cryptocurrency - PostsMania

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Russia Sanctions Could Drive More People To Crypto, Analysts Say by anigold: 12:46 pm On 3 Mar

For investors, these are unprecedented times.

The world has been rocked by a deadly pandemic. Europe is at war; Russia in an economic chokehold. The United States is experiencing its highest inflation in 40 years and it’s likely to get worse. Currency and equity markets are gripped by a scale of volatility unseen in years. The status quo of the traditional geopolitical order faces a crisis. And commodities are trading like meme stocks.

Enter cryptocurrency – a $3 trillion market that promises to liberate people from the grip of the global financial system.

Cryptocurrencies have become increasingly mainstream. Five years ago, the market was valued at just $14bn – a fraction of what it is today.

The US government, among others, is trying to get in on the digital asset boom, seeking to regulate and reinvent a sector operating largely out of its reach.

US President Joe Biden on Wednesday signed an executive order requiring the government to assess the risks and benefits of creating its own central bank digital currency (CBDC).

While taking inspiration from cryptocurrencies and following some of the same principles, CBDCs are not regarded as crypto as they are regulated by a central authority. The White House will also look into mitigating crypto risks for consumers and leading economic and technological competitiveness and innovation in the sector.

China debuted its version of a CBDC, the digital yuan, during the Beijing Winter Olympic Games last month.
According to the Pew Research Center, 16 percent of Americans have dabbled in trading, using, and investing in cryptocurrencies. That figure is likely to rise considerably, crypto industry figures told Al Jazeera.

“I think we may refer to 2022 as the year of the big catalyst for crypto because what governments did is actually force adoption,” Ran Neuner, host of CNBC’s Crypto Trader, told Al Jazeera. “They put people in a position where they had no choice but to flee to the other system.”

''What governments did’
The US and its allies have imposed sanctions on Russia over Russian President Vladimir Putin’s decision to invade Ukraine.

The world’s largest credit card networks, Visa and Mastercard, and internet payments giant PayPal announced over the weekend that they are suspending services in Russia. That means that credit and debit cards issued by Russian banks will no longer work outside of Russia. Russian businesses also will not be able to accept cards issued from outside the country.

“It’s the most ridiculous thing,” Neuner said. “Russians that are living in the US but have bank accounts in Russia have had their credit cards cut off. Essentially, people are forced onto the alternative financial system.”

Russians have also been barred from using SWIFT – an international bank messaging system vital for transactions. Russia’s central bank has had its assets seized and hundreds of companies in the tech, oil, media and consumer goods sectors have pulled their operations from the country. Last week, the rouble hit an all-time low.

If your participation in the global financial system is dependent on the appeasement of the US and its allies and if you’re not in good standing with those people, they kick you out of that system, maybe you’re going to look for a different global financial system to participate in.

Why Bitcoin is the most decentralised cryptocurrency
Bitcoin is the world’s most well-known fully decentralised cryptocurrency. The majority of the digital coin’s trading is done on a peer-to-peer basis. There is no middleman, unlike with banks, and transactions are recorded on a blockchain – a digital ledger maintained by a network of computers.

Bitcoin was created by Satoshi Nakamoto, the pseudonymous for the anonymous person or entity that basically wrote the code. Nobody funded it, nobody invested in it –it’s open-source software. There was economic incentive for people to join the network to mine Bitcoin and over time, that incentive led to the creation of what Bitcoin enthusiasts consider the strongest computer network in the world.

To change something in the Bitcoin infrastructure, a proposal must first be submitted and then approved by many different players in the Bitcoin universe, including the people who mine the Bitcoin and the nodes – those who run the software.

This infrastructure is what makes Bitcoin resilient to nation-state attack and meddling.

‘The analogy here is Gmail versus email’
In addition to the decentralised Bitcoin network, there are centralised and decentralised trading platforms where one can buy, sell, and trade Bitcoin and thousands of other digital currencies and assets.


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