Circle’s CEO says the Russia-Ukraine crisis reveals the paradox of cryptocurrencies

The CEO of Circle, the company behind the USDC stablecoin, has referred to cryptocurrencies as a double-edged sword. Jeremy Allaire’s remarks come amid the heightened tensions between Russia and Ukraine.

The Ukrainian government had urged all major exchanges to freeze the accounts of Russian and Belarusian users, but this request has been denied, raising concerns over crypto regulations. 

Crypto as a double-edged sword amid Russia-Ukraine crisis

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This week, the cryptocurrency market has been rallying, with the global crypto market cap moving to above $2 trillion. The geopolitical tensions in Ukraine have ignited debate on how cryptocurrencies can be used when the traditional financial sector has been disrupted. 

According to a Bloomberg report, Allaire notes that the Russia-Ukraine crisis shows that crypto is a double-edged sword. On one side, more than $36 million worth of cryptocurrency donations has been donated to Ukraine’s military and charity organizations. On the other hand, there are concerns that Russia could use crypto to evade Western sanctions.

“People are celebrating that. But it also allows people to evade things. The open internet is a double-edged sword, and that’s the case with crypto,” Allaire said.

Russia facing harsh Western sanctions

The Ukraine vice minister, Mykhailo Fedorov, recently urged all major exchanges to block the accounts of Russian and Belarusian users. However, this has been denied by some of the leading exchanges such as Binance, Kraken and Coinbase

Allaire noted that these exchanges did not have the full extent of the information needed to identify “high-risk” activities. “We don’t necessarily know – just like the US doesn’t know – if piles of cash are being used by Russian oligarchs. So you don’t know,” he said.

Cryptocurrencies are in high demand in Russia following the plunge of the Russian ruble to all-time lows. The price of Bitcoin is sitting at all-time highs against the ruble. Moreover, some reports have stated that people are being forced to part with $20,000 more above Bitcoin’s market price to buy the coin.

The only firm operating in the crypto space that has discontinued its services to Russian users is Animoca Brand. This is a blockchain gaming and NFT platform. Another Ukrainian NFT platform also announced freezing the accounts of Russian and Belarusian users.