On Thursday, March 24, Pavel Zavalny, chairman of Russia’s State Duma Committee for Energy, announced payment terms for countries looking to purchase oil and gas from Russia.
sanctions were designed to impose export controls designed to hinder imports from Russia, block Russian banks from completing transactions with Western companies as well as preventing access to Russian financial assets held at Western financial institutions.
For instance, if an exchange like Binance were to be assisting the Russian government with payments, then Binance could be held liable for breaking the sanctions.
Recent trading volume on Binance’s USDT/RUB pair supported the accusation as it had peaked from a norm of around $10 million to $34 million on February 28, 2022, and then to $37 million on March 6.
Sooner or later, the money will have to be cashed in which means that it will have reached that endpoint where law enforcement agencies can see where the illicit funds have landed and will then step in to seize them.
The sanctions move comes a little too soon for the Russian government to deploy its digital ruble, the Bank of Russia’s central bank digital currency rules and suspicious activity reporting that other CBDCs will undergo.
sanctions depends on just how much authority the country still has on other countries like China, Turkey and indeed any other countries which seem closer to Russia’s sphere of influence than that of the U.S.
What might raise people’s eyebrows is that Russia is offering bitcoin as a mode of payment to two countries that have so far shown hostility to Bitcoin.
It will be interesting to see exactly whether these bitcoin/oil/gas swaps do take place.
There is likely to be a record of the transaction on the blockchain anyway but, like I said above, Bitcoin is pseudonymous and there are ways and means of breaking up a purchase into several mini-transactions so as to conceal the scale of the trades and to wrongfoot any unwanted blockchain auditing by third parties.
We don’t know whether Russia, China or Turkey have enough rubles, yuan or lira tradable with bitcoin to make regular payments for the quantities of oil or gas that these large economies will be demanding.
sanctions will work as intended, but, on the Bitcoin side, it does present a dilemma for the community because Bitcoiners have often boasted that Bitcoin does not care who you are, as long as you are who you say you are and you do not double-spend your bitcoin.