In the heart of Kazan, Russia, one of the most strategic events of the year is being held: the BRICS Summit 2024. At a crucial moment for the global economy, the event seems intent on exploring a theme capable of transforming international balances: cryptocurrencies. According to sources from media specialized in finance, the summit could focus on an innovation that would rewrite global economic dynamics. With Russia looking for ways out of Western sanctions, the adoption of a payment system based on blockchain technology could represent a change of direction significant for the entire BRICS bloc.
One of the key projects under discussion would be BRICS Paya digital platform designed to streamline transactions between the bloc’s nations, reducing dependence on the US dollar. Thanks to blockchain, cryptocurrencies such as XRP and Bitcoin could become instruments of exchange between BRICS members, challenging the dominance of Western financial institutions.
This strategy is confirmed by the data from the Chainalysis 2024 report, published last October 17, which highlights how the Russia has already started using cryptocurrencies to circumvent sanctions. The leading blockchain analytics firm has been tracking global flows, revealing that between July 2023 and June 2024, Russia received over $182 billion in cryptocurrencies. This massive influx was aided by the rapid expansion of DeFi (decentralized finance), which saw a 173% increase in trading across decentralized platforms in Russia.
(DeFi), in fact, is proving to be a unique opportunity to evade regulatory restrictions and economic sanctionsgiving users greater control over their digital assets, with higher anonymity and less external interference. However, Russia is not alone in using cryptocurrencies in this context. According to data from Chainalysis, Ukraine also recorded inflows of over $106 billion in the same period, with a 160% increase in the use of DeFi platforms. This scenario highlights how, despite conflict and economic instability, both countries are using cryptocurrencies to circumvent the restrictions imposed by traditional financial systems.
The economic sanctions, designed to isolate Russia and put its economy in difficulty, seem instead to have paradoxically achieved a counterproductive effect. Rather than isolating Russia from global financial markets, sanctions have accelerated the adoption of decentralized technologies like cryptocurrencies, turning the country into a major player in Eastern Europe. Russia’s ability to use blockchain and DeFi to build a parallel economy, immune to traditional controls, therefore raises serious questions about the real effectiveness of sanctions.
The rise of cryptocurrencies is rapidly revolutionizing the financial landscape of Eastern Europecreating new opportunities in a context marked by economic isolation and conflict. However, this transformation brings with it significant challenges, especially on the regulatory and security front.
Russia has demonstrated how the use of cryptocurrencies and DeFi allows it to evade the controls of global financial institutions, raising fundamental questions: Are economic sanctions really losing power in the face of the unstoppable progress of blockchain? In an increasingly digital and interconnected context, sanctions appear as fragile as sand barriers in front of the raging river of financial innovation.
