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Transactions on Russian crypto exchanges reached nearly $52 billion in 2023, according to the country’s Central Bank.
The bank reported that over $51.67 billion in Bitcoin (BTC) and Ethereum (ETH) transactions it observed on “large crypto exchanges” was “potentially” linked to Russian individuals.
However, the Central Bank itself acknowledged that a majority of Russians do not utilize major crypto exchanges for trading. This implies that the “actual” figure might be significantly higher.
Bitcoin prices versus the Russian ruble over the past six months. (Source: Google Finance)
Is Russian Crypto Exchange Usage Surpassed by P2P Market?
The Central Bank presented its crypto findings in its annual report for the Financial Year 2023. The authors of the report stated:
“An analysis of the cryptoasset market suggests a potentially significant level of engagement of Russians in the market. By the end of 2023, the volume of Bitcoin and Ethereum transactions on the largest crypto exchanges – potentially linked to Russians – reached 4.78 trillion rubles.”
However, this figure likely does not represent the complete picture.
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According to the bank’s own assessments, the peer-to-peer (P2P) market has emerged as “the primary channel for acquiring cryptoassets in Russia.”
The bank previously indicated that “in the first half of 2023,” the average monthly volume of P2P transactions “among Russians” rose “by more than 50%.”
How Does the Russian Central Bank Derive Crypto Exchange Data?
The bank mentioned that its data related to exchanges was derived from calculations utilizing the blockchain analytics tool Prograchniy Blockchain (which translates to “Transparent Blockchain”).
This tool was developed by Rosfinmonitoring, the country’s anti-money laundering agency. Rosfinmonitoring created the tool in 2021 and asserts that it can track citizens’ transactions across various blockchain networks.
According to a 2023 report by Kommersant, Rosfinmonitoring claimed that its tool is so precise that it even assisted law enforcement in solving a crypto-related contract killing case.
The tool supplies government users with information regarding both the sender and the recipient of cryptoasset transactions.
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Bloomberg: “Russia’s central bank stated it has no better alternatives than the Chinese yuan for its reserves following two years of the Kremlin’s conflict in Ukraine and the subsequent confiscation of its international assets. As of March 22, Russia’s…https://t.co/GnKrSNaJLU via @markets— Michael Pettis (@michaelxpettis) March 30, 2024
In June 2023, a Russian IT company reported that nearly $300 million worth of crypto trades are conducted “daily” on the country’s P2P market.
Meanwhile, the bank noted in December of the previous year that it observed a “decline” in the number of Russians utilizing major foreign crypto exchange platforms for buying and selling crypto.
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