Russia, Ukraine, and cryptocurrency as a tool of war

Marianne Schneider-Petsinger explains how Russia may try to use cryptocurrencies and its ‘digital rouble’ to evade international sanctions.

Explainer Video
Published 25 March 2022 Updated 25 August 2022 2 minute watch

Russia, Ukraine, and cryptocurrency as a tool of war

— Marianne Schneider-Petsinger explains how Russia may try to use cryptocurrencies and its 'digital rouble' to evade international sanctions.

Marianne Schneider-Petsinger

Former Senior Research Fellow, Global Economy and Finance Programme; Project Director, Global Trade Policy Forum

Russia’s invasion of Ukraine could be a catalyst for the growth of cryptocurrencies in general but also as an opportunity to use them as a tool for war. But although there are multiple ways in which Russia can do this in theory, it is much more difficult in practice.

Developing a digital rouble could allow Russia to trade directly with other countries without the need for US dollars. And privately-issued cryptocurrencies could help evade sanctions. Ukraine is also using cryptocurrencies to fundraise to fight back against Russia’s aggression.

Cryptocurrency transactions have been on the rise since the invasion but there is no evidence yet they are being used in a widespread fashion to bypass sanctions.