The Russian crypto circuit is not just an experiment, but a strategic response to external pressure. Sanctions certainly complicate access to global markets, but they are unable to destroy the economic logic of this structure. On the contrary, they only accelerate its formation, forcing the search for new avenues for cross-border settlements and investments.
Who is the crypto circuit being built for?
The crypto circuit is being created not for a single interest group, but for the entire spectrum of market participants. For foreign trade companies, it is a natural extension of electronic document management (EDM) to international settlements. Investment divisions gain access to new digital products, including opportunities for digital financial assets (DFAs) and attracting foreign capital. Financial and credit institutions expand their range of instruments, from long-term lending to factoring and debt securitization. For the state, represented by the Central Bank, the Ministry of Finance, and the Federal Tax Service, it is a way to channel the de facto existing industry into a regulated, taxable framework and reduce AML/CFT risks.
It is important to understand that for individuals and legal entities in each of these categories, instruments that are currently in acute shortage will appear. The share of cross-border transfers in cryptocurrency is already growing by 20-30% annually. The only problem that regulation solves is access to these instruments for large banks and the regulator.
Sanctions as a catalyst, not a threat
Circumventing sanctions is not the primary goal of the crypto circuit. Pressure will come — and is already being applied within the framework of the 20th EU sanctions package — but market participants are aware of the risks and are taking measures. Infrastructure elements are unlikely to fall under secondary sanctions. The system will operate in the same way as fiat transactions. Three key approaches are used to reduce risks: interaction with FOSS-licensed solutions and intermediary links to blur the trail; managing the issuance of stablecoins based on banks, which technically makes it impossible to track and block the entire system; and using alternative solutions, including DFAs and tokenization, as a backup option.
Value in cross-border capability
The value of cryptocurrency lies in its cross-border nature. If the circuit is completely closed within Russia, its economic meaning will be significantly diminished. However, such a situation is impossible due to the decentralization of digital currencies. One can try to restrict entry-exit into fiat outside of Russia, but this will not completely close the circuit — not all countries support the policy of isolation, and the DeFi sphere is so developed that it is technically impossible to erect all barriers without killing the corresponding instruments.
Who wins and who loses?
In the long term, only the black market wins — it will not disappear completely, but the financial flow through completely unregulated organizations will gradually decline. Russian banks are already deploying their own infrastructure and know how to work with crypto instruments, so they come out ahead. Small and medium-sized capital, as well as startups, lose out. For them, there are three paths: migration to other countries, sale to banks in the near future, or creating products that banks currently lack time for but that are needed by the market and specific client banks.
My conclusion: The crypto circuit is not an attempt to escape sanctions, but an inevitable evolution of the financial system. Regulation will give the "green light" only to institutional players with large client bases. Small businesses that cannot adapt to the new rules will be absorbed or pushed out. This is a tough but logical stage of market development.