Russian Stablecoin use increased after Ukraine attack: Report

Chainalysis, an American blockchain analytics company, has revealed that there is a rise in stablecoin utilization in Russia after the Russian attack over Ukraine, which has since witnessed sanctions and expansion affecting the country.

On October 12, a report was issued disclosing that the share of Stablecoin’s transaction volume on initially Russian services rose from 42% in January to 67% in March after the attack and has carried on to rise since.

An unknown analyst on regional money laundering interacting with Chainalysis advised that Russia’s elimination from the cross-border system SWIFT is possibly to witness crypto being used for cross-border payments, with stablecoins possibly being the favored medium of exchange because of their price stability.

The report also reveals that a few of the hike in stablecoin usage is possible because of general Russian citizens trading the Ruble for stablecoins for the protection of the value of their assets in between high levels of inflation from the time of initiation of the war.

“Some of that might be because of businesses adopting cryptocurrency for international transactions, it is also possible that a few of hike is because of general Russian citizens trading for stablecoins for safeguarding their assets’ value, as we debbaterd earlier,” the report mentioned.

At the same time, Chainalysis also highlighted in its report that Eastern Europe had the majority of the total share of risky crypto activity related to any other area all over the world in 2021.

Share of the activity

18.2% of crypto activity in the area is mostly insecure and illegal, with Eastern Asia the next largest at 15% after that, the third position is of Sub-Sahara Africa, however, the later had by far the biggest share of illegal activity, including crypto.

The company rejected unsafe and illegal activity as any transaction that includes an address linked with a risky body, like exchanges with low or no Know-Your-Customer (KYC) needs. At the same time, illegal activity is stated as transactions linked with a known criminal body.

Current developments respecting to crypto will rise the number in the future. The European Union newly prohibited crypto payments from Russians to European Wallet providers, which can influence more crypto users to utilize lesser-known exchanges with no need for KYC to have the sanctions.

The report highlighted that crypto being utilized to run around sanctions means there requires to be more debate on enhancing the advantages of sanctions but also mentioned the positive role crypto has had in easing donations to the Ukrainian cause, keeping the recent figure at more than $65 million.

Before this, Chainalysis highlighted that the popularity of Russian cybercriminals was driving important ransomware and crypto-based money laundering activity, highlighting:

“Specially, we have actually witnessed an oversized amount of ransomware and crypto-based money laundering in Eastern Europr, with the later backed by a big environment of unsafe crypto businesses.”

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing