After a period of restricted access, the world’s largest crypto exchange Binance has finally granted its Russian users full access to its services again. The restriction which came due to international sanctions on Russia is finally over as Russians can now buy crypto with Russian bank cards.
Russia is under sanctions concerning the war with Ukraine, and as a result, several services to the country have been cut off. Most notable among such restrictions is the restriction on sending and receiving of funds within the EU region. In solidarity, Binance and other top crypto exchanges placed restrictions on Russian users’ accounts.
As a result, the country has found other ways of sending and receiving funds, thus rendering the sanctions ineffective. This could have caused Binance to restore full access to users from Russia. A Russian blogger, Kirill Sargeev wrote that the exchange restored compatibility with Russian bank cards this week, making it possible to buy crypto directly with such cards going forward.
Binance first placed a restriction on Russian accounts in March when it blocked transactions with Russian bank cards. This caused Visa and Mastercard to withdraw their services from the country to make Binance’s restriction effective.
In April, the exchange deactivated the accounts of Russians holding up to 10,000 Euros. This made it impossible for them to make new deposits or trade, but smaller accounts remained active.
Russia Bypasses Sanctions
To survive the sanctions by the EU backed by Binance, Russia, which is known for its strict laws against cryptocurrencies reconsidered and reviewed its laws to let its citizens use crypto for varying reasons. Although the restriction on local use of crypto for buying and selling is still intact, the government has allowed the use of cryptocurrencies for international transactions since fiat use within the region has been banned.
The government even went further to encourage crypto mining, since its citizens were not allowed to access top crypto exchanges. As a result, Russia grew to become the second largest crypto mining destination after the United States. This showed the potential of crypto to be used to bypass sanctions and bank the unbanked in all parts of the world.
Russia Pursues CBDC
Also as part of efforts to effectively bypass these sanctions which also saw international payment company SWIFT withdraw from the country, Russia has recently been pursuing the idea of a central bank digital currency. Though the country had been slow in implementing the plan, the recent developments made it a priority.
The pilot test of the CBDC which was earlier scheduled for March was postponed till April and will hopefully be carried out. Selected banks will be used for the testing initially, after which the wider public will be involved to see how it can be used for buying and selling within the country instead of public cryptocurrencies like Bitcoin.
The idea may be to have a centralized digital currency that may be easily controlled rather than a decentralized one that the government has no control over. China is another country that has greatly advanced with its CBDC development and is now testing it for international settlements.
Binance restoring access to Russians is definitely some much needed succor, but Russia may not be going back on its new stance on digital currencies in case of further sanctions in the future.
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