USDT and BTC trade volumes skyrocket

Tether (USDT), a cryptocurrency based on the US dollar, has been registering increased trading activity over the past five days.

This is because of the slew of sanctions that froze Russia’s central bank overseas reserves and made European companies cut ties with the country’s oil and gas firms. Since the latest ream of sanctions was announced on Sunday, the ruble has been in free fall.

Unable to buy dollars and euros in Russia, many tech-savvy Russians have turned to USDT. Trading hit $29.4m on Monday according to Arcane Research, indicating that Russians are preparing for one of the worst economic downturns in living memory.

Some argue it’s unprecedented. USDT stablecoins are a good choice as they are reliant on a central bank currency that has high value, but not the ruble apparently.

The USDT is particularly tied to the value of the US dollar, which has improved. Russia has been disconnected from SWIFT, an international payment system that is used mostly in Europe and the US, and Russians will no longer be able to send currency abroad, as per a special decree issued by President Vladimir Putin this week.

Meanwhile, others have been putting their money in bitcoin (BTC). Last Thursday, $16m worth of ruble was put in BTC. According to Arcane’s Bendik Norheim Schei, this is not surprising.

“Under the current market conditions, I’m not surprised to see investors, at least those in Russia, seeking stablecoins and not taking on the market risk of BTC. This is about saving their funds, not investing”, Schei said.

Russia had plans to pass crypto legislation before the war. Now, cryptocurrencies are helping both opposing sides in the conflict.

Source

Updated: 03/01/2022 — 16:00