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Can cryptocurrency be a safe haven in Russia?

  • April 14, 2022

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Cryptocurrency has become popular, seeing it's decentralized and detached from the traditional financial system. The Russian currency has collapsed due to heavy sanctions placed on the country. For this reason, citizens cannot easily access foreign currencies, making them think of a better alternative. Some Russians look up to and acquire cryptocurrencies, and this is something that is happening in Ukraine. Is cryptocurrency a safe haven in Russia, especially during the Russia-Ukraine war?

How is the Russian economy?

Russia is known to have numerous resources, particularly natural gas and oil. Some sources argue that the nation has 30% of the world's natural resources. As a result, Russia ranks as the fifth largest economy in Europe and the eleventh largest economy globally.

But how is the current economy during this war period? After western sanctions on Moscow, the country has taken a blow for invading Ukraine. Many companies have left the country, leaving people unemployed. This has led the Russian economy to a standstill. If the economy were measured on today's exchange rate, it would be the twenty-second largest globally. The gross domestic product (GDP) is not higher than Ohio State.  

The Russian currency has also dropped. For example, if one had 1 million Russian Rubles in the bank, the money has dropped to half a million Russian Rubles. This is a far cry compared to when Russia was a superpower. In

Can cryptocurrencies be a safe haven in Russia?

The Russia-Ukraine war has led to bank restrictions in Russia. The government always controls banks; hence citizens have no option but to adhere to the regulations. Therefore, cryptocurrencies are a safe alternative during this war than banks. Thanks to decentralized cryptocurrencies, they are not controlled by the government. They are not limited or restricted by anyone. Besides that, the country has banned foreign currencies. With cryptocurrencies, one can change money to Russian Rubles.

What are the advantages of cryptocurrency?

Decentralized: cryptocurrency is not controlled by third-party like central authorities and the government.

Transparency: all transactions are done on a public distributed blockchain ledger. One can look at the transaction data using tools.

Privacy: it allows you to remain anonymous.

Security: users have private keys for crypto wallets; hence no one can access your funds.

Accessibility: anyone can use crypto. The only requirements are a computer or smartphone and a good internet connection.

Transaction speed and costs: you can send assets quickly from one account to the other anywhere. Also, the transaction costs are lower than centralized systems.

Where to buy and sell cryptocurrencies

Even though many platforms on the internet allow selling and buying crypto, it's hard to tell which one is legit. Gate.io is stable and one of the largest crypto exchanges since its establishment in 2013. The platform has over 1300 crypto like Bitcoin, Dogecoin, Ethereum, and Litecoin. In addition to that, it offers multiple ways to secure users' funds—for example, SSL encryption, two-factor authentication, and KYC requirements. The platform also has relatively low fees of 0.2% of the total amount.

Conclusion

The current situation in Russia has led to bank restrictions and a ban on foreign currencies. It has also made the country's currency lose its value tremendously. The government controls financial institutions like banks. Cryptocurrencies are decentralized, which means that a third party cannot control them. Therefore, there is a doubt that they are a safe haven in Russia. If you are looking for a crypto platform to buy and sell cryptocurrencies, Gate.io is a stable exchange with years of experience. 

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