Restrictions for Russians, regulation of the crypto market in the USA and other key events of the week
New bans and sanctions for Russian users, Biden’s executive order on cryptocurrencies and a detailed analysis of digital assets in the weekly review of Getblock Magazine
11.03.2022 - 09:50
The bitcoin exchange rate broke through the important $40 000 mark in the past seven days. This happened on March 9, and a local high of $42 455 was reached on the same day (according to the CoinMarketCap portal). After that, the value of the asset was corrected and is at $39 000 as of March 11.
The second-largest cryptocurrency by capitalization, Ethereum, lost around 4,9% in price over the week. The amount of fees on the network has also declined significantly, reaching a six-month low. The native token of the Binance cryptocurrency exchange (BNB) fell by 5,5%.
The total capitalization of the crypto market stands at $1,769 trillion, with bitcoin dominating 42,5%. Ethereum’s share is 17,8%. As can be seen on the infographic of the Coin360 portal, most of the assets are in the red zone.
Source: Coin360A wave of bans and restrictions for users from Russia
The sanctions imposed against Russia by the United States and the European Union have also affected the sphere of cryptocurrencies. After the start of the special operation in Ukraine, the Kuna, WhiteBIT, and CEX.io exchanges completely blocked users from the Russian Federation. The popular Metamask wallet also reported restrictions in operation in a number of regions.
The mining sector has also been affected. Ethermine, the largest mining pool, suspended operations in Russia and Belarus. According to Bitfly, this decision was taken in accordance with the law on money laundering in the financial markets. The lists of blocked countries also include Afghanistan, Cambodia, Iran, Iraq, Syria, and the DPRK. Another major mining pool, BTC.COM, also blocked access for Russian users on March 7.
Some centralized exchanges have imposed a number of restrictions on customers from Russia. Coinbase has blocked some 25 000 users believed by the platform to be linked to illegal activities. And Binance, the world’s largest cryptocurrency exchange by trading volume, has disabled support for VISA and Mastercard cards issued in Russia as of March 10.
“All transactions initiated with Mastercard and Visa cards issued in Russia will be unavailable on Binance. In addition, all transactions initiated with Mastercard and Visa cards by financial institutions outside of Russia will also be unavailable within the Russian Federation on Binance.”
At the time of writing, Binance customers are allowed to use cards from non-sanctioned Russian banks for P2P trading on the exchange.
In recent breaking news, the European Union’s new sanctions package includes cryptocurrencies. Western countries believe that amid the disconnection of banks from SWIFT and other restrictions, a number of individuals on the sanctions list will use cryptocurrencies to circumvent sanctions. Chainalysis has already launched a free tool to detect sanctioned wallets using a smart contract. It checks addresses from EVM-compatible networks with a blacklist of users.
In response to the adopted restrictions, United Russia held an expert roundtable on the development of blockchain technologies and regulation of the digital assets market. The roundtable participants concluded that the legalization of cryptocurrencies and their legal conversion into the Russian ruble will help minimize the impact of sanctions.
The Russian Chamber of Commerce and Industry called for the early release of the digital ruble to evade sanctions. Vladimir Gamza, Chairman of the Council of the Chamber of Commerce and Industry of the Russian Federation, said that the agency can use the digital ruble and cryptocurrencies in its financial settlement system.
The US has decided on its approach to regulating the crypto market
On Wednesday, March 9, the White House released a nationwide strategy for regulating the sphere of cryptocurrencies. The executive order sets national policy on digital assets in six key areas:
- consumer and investor protection;
- financial stability;
- illegal use of cryptocurrencies;
- US leadership in the global financial system;
- responsible innovation.
The document also directs the Department of Justice, Treasury, and other organizations to study the legal and economic implications of launching a central bank digital currency (CBDC).
The head of the US Securities and Exchange Commission (SEC), Gary Gensler, supported the order and declared the regulator’s willingness to cooperate with all US agencies to oversee the cryptocurrency market. In addition, the SEC will be part of the Financial Literacy Education Commission. Its goal is to provide novice investors with comprehensive information about the principles of cryptocurrencies’ operation and how they differ from other assets.
India’s national digital currency development may be finalized by the end of 2022. This was announced by Finance Minister Nirmala Sitharaman. According to her, a central bank digital currency has clear advantages as it can be used to make mass payments between countries, large transactions between institutions and the central banks of each country themselves.
The central bank of the Philippines this week announced the launch of its own research project on state-owned cryptocurrencies. The research will examine the architecture and technologies of digital state currencies and show the prospects for their use.
Work continues on the launch of the Rwandan franc. The final stage of research is scheduled for December 2022. If the Rwandan regulator decides that it is appropriate for use within the country, the asset can be launched as early as 2023.
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