While Russia’s rouble is buckling under sanctions, Bitcoin and other digital currencies are rising, stoking speculation that their use could help Moscow bypass the West’s economic blockade.
Russia’s invasion of Ukraine has sparked a slew of economic sanctions from governments around the world, sending the Russian currency plunging to record lows and raising the spectre of hyperinflation.
Meanwhile, crypto trading has risen, with Ukraine calling for donations in digital currencies to back its war effort, and raising $35 million (€31.5 million) so far, according to the blockchain analysis firm Elliptic.
That means that all of the Bitcoin traded worldwide is worth, together, more than all of the roubles in circulation worldwide.
The Russian currency is currently ranked 17th in market value, behind the Thai baht and the Mexican peso.
The rouble is now worth even less than Dogecoin, a cryptocurrency that was initially created as a joke poking fun at the wild speculation surrounding cryptocurrencies.
On Wednesday, Ukraine’s vice prime minister Mykhailo Fedorov announced his country was now also accepting donations in Dogecoin, also dubbed the “meme coin”.
<blockquote class=”twitter-tweet”><p lang=”en” dir=”ltr”><a href=”https://twitter.com/dogecoin?ref_src=twsrc%5Etfw”>@dogecoin</a> exceeded Russian ruble in value. We start to accept donations in meme coin. Now even meme can support our army and save lives from Russian invaders. <a href=”https://twitter.com/search?q=%24DOGE&src=ctag&ref_src=twsrc%5Etfw”>$DOGE</a> owners of the world, <a href=”https://twitter.com/elonmusk?ref_src=twsrc%5Etfw”>@elonmusk</a>, <a href=”https://twitter.com/BillyM2k?ref_src=twsrc%5Etfw”>@BillyM2k</a>, let's do it. Official <a href=”https://twitter.com/search?q=%24DOGE&src=ctag&ref_src=twsrc%5Etfw”>$DOGE</a> wallet: DS76K9uJJzQjCFvAbpPGtFerp1qkJoeLwL</p>— Mykhailo Fedorov (@FedorovMykhailo) <a href=”https://twitter.com/FedorovMykhailo/status/1498982855162175488?ref_src=twsrc%5Etfw”>March 2, 2022</a></blockquote> <script async src=”https://platform.twitter.com/widgets.js” charset=”utf-8″></script>
In February, Ukraine’s parliament passed a law legalising the use of cryptocurrency, and the country ranks fourth in the world in terms of cryptocurrency adoption, according to the blockchain data platform Chainalysis.
Rouble buckling under sanctions
Western allies have sought to punish Russia for its attack with harsh financial sanctions, excluding some Russian banks from the SWIFT international payments system and freezing Russia’s central bank reserves.
The sanctions have caused the rouble to plunge to record lows against the dollar, and sent Russian people queuing outside banks to withdraw cash.
As the value of the rouble tumbles and the risk of hyperinflation grows, the Russian central bank moved to raise its key interest rate to 20 per cent on Monday.