Financial Sanctions to Russia are Easier than Ever for Russians to Evade. Thanks to Cryptos

The West's first round of economic penalties on Russia failed to stop Russian President Vladimir Putin from waging a full-scale invasion of Ukraine.
Now, the US is taking a tougher stance, announcing new sanctions aimed at Russian institutions and "corrupt billionaires."
However, in my opinion, those safeguards, which so far have not targeted Putin, are becoming increasingly difficult to circumvent, thanks in part to a spike in bitcoin and crypto currencies usage in Russia.

Sanctions imposed by the United States and the European Union rely primarily on banks to enforce the regulations.
It is the bank's responsibility to flag and restrict transactions denominated in traditional currency such as dollars or euros if a sanctioned business or individual wishes to do so.

However, digital currencies operate outside the scope of traditional global banking, with transactions recorded on the blockchain, a public ledger.

If the Russians decide — and circumstances might force them — to avoid using any currency other than cryptocurrencies, they will be able to bypass practically all of the penalties imposed by the western economies.

This is a problem that the US Treasury is well aware of.
Officials warned in an October assessment that digital currencies might possibly diminish the efficacy of American sanctions by allowing rogue actors to store and transfer money outside of the traditional financial system. If left unchecked, these digital assets and payment networks might undermine the effectiveness of sanctions.

Look no farther than Eastern Europe, which, according to Chainalysis analysis, has one of the highest rates of crypto transaction volume related with criminal activity.
Darknet markets, which are websites used for illegal deals, raked in a record $1.7 billion in cryptocurrency in 2020, the majority of it in Bitcoin. One specialized Russian language only market called "Hydra" is responsible for nearly all of the growth in the darknet market that year.

In a report released earlier this month by Chainalysis, it stated that Hydra is by far the largest darknet market in the globe, accounting for over 75 percent of darknet market revenue worldwide in 2020.

Of course, avoiding sanctions isn't as simple as converting all of your dollars to Bitcoin.
According to experts in the matter, it's difficult to buy anything with cryptocurrency, especially large items...for now, because things can change and they can change very very fast in my experience. Consider food, which Russia has always imported, will a food exporter somewhere in the world accept bitcoin that changes every day — every minute of every day — or will they demand US dollars, the world's reserve currency?

Another problem is that Russia's oil trade, which accounts for a significant chunk of the country's GDP, is denominated in US dollars. To buy anything with bitcoin, you need an off ramp to a government-issued currency like the dollar. Because Bitcoin and other cryptos can be traced on the blockchain, it's not a comprehensive answer for the Russian oligarchs behind Putin. Although, laundering those funds is more difficult, but not impossible.

Iran's Path

I think there are other ways, at least in principle, for Russia to ease the pain of sanctions by following Iran's path. Iran, much like Russia, is an oil-exporting country that has been subjected to a near total economic blockade by the United States for decades, including import prohibitions and sanctions on Iranian financial institutions. Literally bullied by western sanctions.

Even as a pariah state, Iran has worked out how to mitigate the impact of sanctions by turning to Bitcoin mining.
Iran has an energy excess that it can't sell, so it's using it to fuel Bitcoin mining, which uses a lot of electricity but pays miners in Bitcoin, a very smart and adaptive indirect way to convert something you cannot export into something readily exportable and the best part is that there are no shipping costs involved. The mining process efficiently converts energy into cryptocurrency. Iran-based miners are paid directly in Bitcoin, which can subsequently be used to pay for imports and this has almost become an official policy inside the Iranian government. It is believed that Iran-based miners contribute for about 4.5 percent of all Bitcoin mining, equating to about $1 billion in annualized revenue.

My Personal Humble View

By having a super power like Russia cornered by sanctions in this manner, the West and the United States might be inadvertently opening the flood gates to an even faster worldwide adoption of crypto assets and eventually dethroning the U.S. Dollar.

Let's remember and make it clear that Biden's administration is not dealing with a small puppy country like Venezuela, Iran or North Korea. They are dealing with a "Superpower" that is even bigger in territory than the U.S., one that cannot be told what to do, but instead orders you to kneel and watch what they can do back to you.

In my opinion, the russians have been preparing for this invasion and subsequent sanctions quite a while ago. Putin is a smart fox and outwitting him might require better political decisions than simple Cold War Era sanctions that have been proved that no longer work anymore. Take a look at all those countries where the U.S. has imposed sanctions on, and you notice that they have grown in numbers lately.

This smells to me like when Germany annexed Austria and the invaded Poland. Almost happened in the same flatlands as Ukraine. They say history repeats itself but in spirals, hopefully, it is not a downward spiral this time

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Photo Credits:
https://unsplash.com/photos/PgdBXEqjSYg (Maxim Tolchinskiy)

All analysis and conclusions above made by me from what I have investigated in the news.
I am writing this down in the Hive blockchain to record how true it turned out to be in the next few years.