- The value of Ruble-denominated Bitcoin has rose to 1.5RUB, as investors run to move out of the ruble.
- Ukraine sent letters to crypto exchanges to stop providing service to Russia, to which Coinbase didn’t comply.
Yesterday, the market witnessed the ruble plummeting by 40% as the West sanctioned restrictions on the fiat currency. This “financial nuclear bomb” led to panic amongst non-resident traders who had invested in the Russian exchange market. The Central Bank of Russia even increased their key interest rate to 20% to avoid cash outflow.
However, earlier this morning, Kaiko, a cryptocurrency research provider in Paris, released data that ruble-denominated bitcoin volume surged to approximately 1.5RUB. This is the highest that the market has witnessed since May.
The non-resident investors fear that the West may impose stricter sanctions on the currency and, therefore in a hurry to move out of the ruble. This has led to a spike in the crypto exchanges based on the ruble. Clara Medalie, a Kaiko research analyst, said in an email to Coindesk that the activity in the market was primarily focused on Binance.
However, “Bitcoin-Ukrainian hryvnia volume has also spiked, but not as high as October levels. BTC-UAH only trades on 2 exchanges – Binance and LocalBitcoin.”
To further cause strain on the ruble, Ukraine has requested eight crypto exchanges named, Coinbase, Binance, Huobi, KuCoin, Bybit, Gate and Whitebait, and Kuna to cease providing service to Russian users. The government is suspecting that Russia may take advantage of virtual currencies to evade the sanctions of the West. Bloomberg has reported that the Biden administration is also demanding the same from the crypto exchanges.
However, in reply, Coinbase has commented that it will not act upon the requests of Ukraine or the Biden administration. Denying service to Russia in this situation will also “punish ordinary Russian citizens”, according to Coinbase.