The stablecoin Tether (USDT), pegged to the United States dollar, has risen by more than 30% in five days against the Russian rublewhich highlights the negative and immediate impact of the ongoing war on the traditional financial system.
The data from Cointelegraph Markets Pro and from the crypto exchange Binance show that the ruble is suffering from inflation, as the USDT/RUB trading pair -for the first time in history- exceeded 105 rubles.
Before the rally, the USDT/RUB pair was holding a comparatively stable market price below 80 rubles. However, With the start of the war between Russia and Ukraine, the price of the ruble against the USDT soared on Thursday, momentarily exceeding 90 rubles.
Given the escalation of tensions, on Sunday, the European Commission announced plans to withdraw Russian banks from the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, messaging system.
Second, we will paralyze the assets of Russia’s central bank.
This will freeze its transactions.
And it will make it impossible for the Central Bank to liquidate its assets. pic.twitter.com/8H9eWkNCW9
– Ursula von der Leyen (@vonderleyen) February 26, 2022
Second, we will cripple the assets of Russia’s central bank. This will freeze your transactions. And it will make it impossible for the Central Bank to liquidate its assets. pic.twitter.com/8H9eWkNCW9
Parallel to this timeline, the value of the ruble experienced a decline and has continued to lose its purchasing power by 30%, devoured by inflation.
As an immediate measure to counter rising inflation of its fiat currency, the Russian central bank doubled key interest rates on Monday, moving from 9.5% to 20%. According to the central bank:
“The increase in the basic interest rate will guarantee a rise in deposit rates to the levels necessary to offset the increased risks of depreciation and inflation. This is necessary to support financial and price stability and protect citizens’ savings from depreciation.”
What’s more, The government has also asked Russian companies to sell 80% of their income in foreign currencies, as threats of a complete international financial ban prevail..
On the other hand, Bitcoin trading volumes (BTC) and altcoin on Ukrainian crypto exchanges have soared more than 200% amid growing concerns on its fiat stability.
As Cointelegraph reported, Major cryptocurrency exchange Kuna, whose volumes were below $1 million on Feb. 21, shot up to nearly $4.1 million in three days. The National Bank of Ukraine has also implemented cash restrictionsincluding withdrawal limits and prohibiting cross-border currency purchases and withdrawals.
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