Insights from a blockchain analytics firm Chainalysis report revealed a rise in Russian stablecoin usage following the Ukraine invasion, which has since seen sanctions and inflation affecting the nation. 

Specifically, the report reportedly disclosed that the share of stablecoin’s transaction volume on primarily Russian services surged from 42% in January to 67% in March after the invasion, and has kept on rising since.

An anonymous professional on regional money laundering speaking to Chainalysis reportedly came up with a suggestion that Russia’s removal from the cross-border system SWIFT has a high possibility to see crypto being taken advantage to help with cross-border transactions, with stablecoins likely to be the preferred means of exchange because of their price stability.

The report further claimed that a few of the rises in stablecoin usage is likely because of ordinary Russian citizens trading the Ruble for stablecoins, as a way to safeguard the value of their assets, during high levels of inflation since the war started.

“While some of that may be due to businesses embracing cryptocurrency for international transactions, it’s also likely that some of the increase is due to ordinary Russian citizens trading for stablecoins in order to protect their assets’ value, as we discussed previously,” the report noted.

Meanwhile, Chainalysis additionally included in its finding that Eastern Europe had the top share of risky crypto activity, in comparison with any other region throughout the globe during 2021.

18.2% of cryptocurrency activity in the region is either “risky” or “illicit,” with Eastern Asia the next highest at 15% and Sub-Saharan Africa coming in third, though the latter had by far the largest share of illicit activity involving cryptocurrency. 

The firm defined risky activity as any transaction that involves an address associated with a risky entity, such as exchanges with low or no Know-Your-Customer (KYC) requirements. Meanwhile, illicit activity is defined as transactions associated with a known criminal entity.