The number of Russians trading cryptocurrencies has been a topic of interest in recent years. With the rise of digital currencies, many citizens have turned to trading as a way to invest and make a profit. However, recent reports suggest that the number of Russians trading crypto has been falling.
According to the Central Bank of Russia, the activity of Russian crypto users fell noticeably in the third quarter of 2023. This correlates with a global decline in investor interest in the cryptoasset market. Many major international crypto exchanges also bar Russia-based crypto traders as a result of US- and EU-led sanctions. Despite this, the Kremlin believes that the number of crypto transactions conducted in Russia has risen by three times in 2023, with transfer volumes “doubling.” The situation is complex, and it remains to be seen how it will play out in the future.
Russian Crypto Traders Feeling Sanctions Bite?
Russian crypto traders are facing challenges as many major international crypto exchanges bar Russia-based crypto traders as a result of US- and EU-led sanctions. However, media outlets have reported that many Russians are using loopholes to evade sanctions. Many traders, they report, continue to use overseas centralized crypto exchanges (CEXs). Binance this year announced its “complete withdrawal from Russia” and the sale of its business to CommEX. The firm has also halted ruble deposits on its platform and will end withdrawals at the end of January next year.
The Central Bank of Russia has warned that “alternative” CEXs could be “risky” for citizens. It warned of the dangers of platforms that specifically “target Russians.” However, the bank suggested that the fall in crypto trading may not be due wholly to sanctions. The bank wrote that the activity of Russian crypto users fell noticeably in the third quarter. This correlates with a global decline in investor interest in the cryptoasset market. The bank concluded that the “share of Russian visitors” in the total number of visits made to CEXs in the second and third quarters of FY2023 had “decreased from 5.8 to 4.9%.”
Chainalysis reported that ruble-denominated crypto activity was just $34.1 million on December 3, 2023, down significantly from a recent peak at $70.7 million on February 24, 2023, and the $158 million recorded on May 12, 2023. Trading between the Russian ruble and crypto assets such as bitcoin and tether has doubled since the invasion of Ukraine began, reaching $60 million a day on Monday, according to data from Chainalysis.
Overall, while the sanctions have impacted the Russian crypto market, the decline in crypto trading may not be solely due to the sanctions. The fall in investor interest in the cryptoasset market globally may have contributed to the decline in activity.
