The country has resulted in cryptocurrencies following a sharp drop in the ruble and some of the nation’s banks blocked from using a key international payments system.

Recall that among the sanctions designed to punish Putin for his attack on Ukraine, February 26 was to ban seven Russian banks from using the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the global banking communication platform.

Forkast reports quoted one Russian ex-pat — who requested anonymity for fear of reprisal as saying the global initiative surprisingly limits the ability of Russian banks to send or receive remittances. The source describes it as a “financial nuclear bomb”.

Gleb Jout, head of Russia at crypto exchange Bitget said: “Even people who were not in crypto at all are now considering how to get Bitcoin, Ethereum, or USDT and basically save some of their money before the country hits a period of extreme hyperinflation, which is already starting now.”

In the days following the February 24th invasion of Ukraine, the daily exchange volume of the ruble and Bitcoin spiked to a nine-month high, while the ruble and USDT, a stablecoin often used as an on-ramp to the broader crypto market, jumped to an eight-month high.

Bitcoin has long been regarded as an alternative currency to fiat and has been used as a store of value and as a means of transaction.  

The Russian currency has fallen by 45% since mid-February to trade at ₽136.50 per U.S. dollar. For many Russians the decline in the currency is eerily reminiscent of the financial crisis in 1998 which saw the ruble tumble from ₽6 to ₽21 per U.S. dollar over a three-week period in September, wiping out the savings of many households.

Jout said he recently relocated to Turkey from Moscow to establish a foreign base from which to help provide financial support to his family back in Russia.

He plans to deliver the aid via blockchain. Jout said that since the crisis began crypto has become more widely accepted in Russia, adding that even his 82-year-old grandmother is using Bitcoin.

“The adoption is coming and it’s very, very real,” Jout said. “Especially in Russia, because you have a population of 145 million and I expect that maybe within this year 15% to 25% of them are going to be totally onboarded into cryptocurrency.”

He added that crypto has taken off in urban areas thanks to graffiti and other forms of underground messaging that promote the blockchain as a way to protect funds from devaluation.

“It’s a guerilla movement because you can’t have influencers and celebrities really come out and openly speak about Bitcoin,” he said.

Many Russians are sending funds to off-wallet exchanges and cashing out in neighbouring countries like Georgia or Armenia. For the most part, these transactions are not cheap, with the purchases taking place on major exchanges with spreads “big enough to land a plane on”, Jout said.