U.S. dollar-pegged stablecoin Tether (USDT) witnessed a spike of over 30% in five days against the Russian ruble — highlighting the negative and immediate impact of the ongoing war on the traditional financial system.
Data from Cointelegraph Markets Pro and crypto exchange Binance show that the ruble (RUB) is undergoing inflation as the USDT/RUB trading pair — for the first time in history — crossed 105 RUB.
Prior to the spike, the USDT/RUB pair maintained a comparatively steady market price below 80 rubles. However, with the commencement of the Russia-Ukraine war, the ruble’s market price against USDT surged on Feb. 24, momentarily exceeding 90 rubles.
As tensions escalated, on Feb. 27, the European Commission announced plans to remove Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) messaging system.
Second, we will paralyse 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
Parallel to this timeline, the value of ruble saw a decline and continued to lose its spending power by 30% — eaten away by inflation.
As an immediate countermeasure against the rising inflation of its fiat currency, the Russian central bank doubled key interest rates on Feb. 28, from 9.5% to 20%. According to the central bank:
“The increase of the key rate will ensure a rise in deposit rates to levels needed to compensate for the increased depreciation and inflation risks. This is needed to support financial and price stability and protect citizens’ savings from depreciation.”
In addition, the government has also asked Russian companies to sell 80% of their foreign currency revenues as threats related to a complete international financial ban prevails.
On the flip side, Bitcoin (BTC) and altcoin trading volumes on Ukrainian crypto exchanges spiked over 200% amid growing concerns about its fiat stability.
As Cointelegraph reported, major crypto exchange Kuna, whose volumes were under $1 million on Feb. 21 spiked up to almost $4.1 million in three days. The National Bank of Ukraine has also implemented cash restrictions including withdrawal limits and banned cross-border foreign currency purchases and withdrawals outright.