The U.S. sanctions, as laid out in its fact sheet, did not mention the use of cryptocurrencies. However, the Treasury Department stated in early March that the sanctions would apply to U.S. citizens and digital asset companies that dealt with cryptocurrencies, i.e., exchanges. The European Central Bank has also voiced such concerns about cryptocurrencies being used for circumventing the sanctions. For instance, if an exchange like Binance were to be assisting the Russian government with payments, then Binance could be held liable for breaking the sanctions.
Pressure may now be put on all exchanges to close down their Russian operations. And indeed, some of them have done so.
Sanctioned Russians might use stablecoins such as USDT, over-the-counter (OTC) desks or cross-border exchanging (perhaps by peer-to-peer or fiat-fiat using exchanges domiciled in a Russia-friendly country).
[Russia's] Ministry of Finance admitted in October 2020 that the digital ruble would come under the Financial Action Task Force’s stringent anti-money laundering (AML) and combating the financing of terrorism (CFT) rules and suspicious activity reporting that other CBDCs will undergo. That closes up any chance of the digital ruble being used for bypassing the sanctions.
The actual reach of the U.S. sanctions depends on just how much authority the country still has on other countries like China, Turkey and indeed any other countries which seem closer to Russia’s sphere of influence than that of the U.S. Recent acti ons from large economies like China, India, Brazil and now South Africa, suggest that the U.S. does not hold as much global sway as it may have twenty years ago.
I have thought of three reasons why this could be just bluster:
Even if Zavalny’s offer is genuine, it may be difficult for anyone to judge whether oil-for-bitcoin transactions have taken place if the three governments wish to hide the fact that they had used bitcoin.
The Bitcoin market is still too small to accommodate the financial demands of three large G20 countries to use it to hide their tracks from the U.S. government.>
The U.S. can only enforce sanctions violations if the U.S. dollar has been used. [...] I find it much more likely that China and Turkey will use a gold swap than a bitcoin swap, simply because they already have practice running such trades.
The strength of these U.S. sanctions is unprecedented because the entire Russian economy is being targeted. [...] On the Bitcoin side, it does present a dilemma for the community because Bitcoiners have often boasted that Bitcoin does not care who you are, as long as you are who you say you are and you do not double-spend your bitcoin.