Attempting to sell Russian goods in Bitcoin (to a constrained set of buyers) would exaggerate its already high volatility and consequently would make it hard for Russia to predict or manage its commodity revenues. Rather, Russia’s substantial gold and yuan reserves make those assets a more viable back-up to support ongoing, limited, trade activities.(6)

Just weeks before invading Ukraine, President Putin and Chinese President Xi Jinping declared a “no-limits” strategic partnership.(9) Russia and China each have developed mutually interoperable alternatives to the SWIFT cross-border payments network, a major tool to enforce U.S. sanctions.(10)

Given that China banned all cryptocurrency transactions and ejected Bitcoin mining in 2021, Bitcoin is not likely to be particularly relevant or helpful to Russia in the current crisis.(12)

Everyday Russians are turning to Bitcoin and dollar-pegged stablecoins to escape the collapsing ruble.(14) This will aggravate Russia’s currency distress and enable capital to flow out to the West.