Cryptocurrencies and the “SPSF” system… Will Russia mitigate the impact of sanctions?

Since the beginning of the Russian invasion of Ukraine, European and American sanctions have been imposed against Moscow, including President Vladimir Putin and senior officials in his government, as well as leaders of the army and many Russian institutions, most notably the consensus on the mechanism of employing the “Swift” financial system to punish Russia, in an attempt to dissuade him from the military operation that began Moscow Thursday against Ukraine.

While Moscow acknowledged that these measures are “strong and painful”, Kremlin spokesman Dmitry Peskov stressed that his country has a plan to respond to them and that the country’s economic reality has changed, stressing that Russia has the ability to compensate for the damage.

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Political analyst and member of the American Democratic Party, Mahdi Afifi, said that there are several cards owned by Russia that make Putin not care much about European and American threats, most notably energy, as Moscow supplies 100 percent to several European countries, and others like Germany get 40 percent, and energy sources. Something that cannot be easily dispensed with and any disruption to its provision could cause crises for European governments.

Afifi added, to “Sky News”, that the second matter, despite the difficulty of using it, is his talk about the possibility of responding in any way and that the nuclear powers are on standby, “which is irresponsible and leads us to a third world war and the end of the world.”

He pointed out that Putin’s ambitions increased and he dreamed of returning to the glories of the Soviet Union with the growth of Russia’s power after its presence in Syria and Africa, which he expressed in previous speeches.

He pointed out that Putin benefited from the US retreat during the administration of former President Donald Trump with Europe, the deterioration in relations with NATO, and the lack of a decisive response to the threats of North Korea and the US internal discord, “these factors formed an opportunity to realize his ambitions.”

He noted that there is a Russian shock from the strong alliance between America and Europe, pointing out that there is still a lot in their pocket to put more pressure on Russia, and that China’s position was not expected after its neutrality, so Beijing is concerned with its interests, and Europe and America consume more than two-thirds of China’s production.

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In turn, the Italian political analyst, Daniele Ruffnetti, said that “Putin has the possibility of launching attacks, and the danger will be a bloodbath, as in the past few hours, he has put nuclear weapons into special service, which is another advanced form of deterrence.”

In addition to that, Russia can use energy markets and third-party files, for example: what will happen in Libya, or in Mali, to give two examples of complex situations in which the Russians are present militarily in crises It has not yet been fully resolved and its solution also depends on contacts with Moscow.”

Professor of Political and International Sciences at Cairo University, Nourhan Al-Sheikh, believes that Moscow has prepared well over the past eight years since the Crimean crisis on all political, security and economic aspects.

Sheikh added, to “Sky News Arabia”, that Putin has strong alliances such as China and has a broader partnership with India, and he has the Shanghai Organization, the BRICS group and the Eurasian Union, all of which are security, economic and strategic spaces within which he moves and allow him to stand firm.

Strategic alliances

He pointed out that Russia is not a small country that can be isolated, as it is a large international power with extended partnerships in Latin America, Asia and the Middle East.

She pointed out that after 2014, Russia worked to form international alliances and alternative policies, which gave it the opportunity to prepare for a more critical moment, as it happened now.

And she considered that Russia is a self-sufficient country in many things, the most important of which are energy and grain, which is the focus of food and national security for any country, and therefore it does not feel a danger from European and American threats.

Italian analyst, George Rutelli, said that “the main red buttons are about energy and food, Russia is a major exporter of gas and a big exporter of wheat and corn, and their prices have already gone up. Many European countries have no way to replace Russian gas in a short time.”

Rutelli added, to “Sky News Arabia”, that liquefied natural gas is one of the options, “but in terms of global supply, we are already very close to the maximum, and there is a lack of regasification stations and storage facilities, in contrast, America’s relations With Russia so weak, so the Biden administration can adopt really tough sanctions without compromising its economy.”

Cryptocurrency and SPFS

He noted that “cryptocurrencies can provide a way to bypass traditional financial channels, as anyone can create an anonymous wallet without the need for an institution, such as a bank, which means bypassing KYC requirements and accessing central economic authorities: sanctioning countries cannot The flow of cryptocurrencies has been stopped by brute force.”

He continued, “While cryptocurrencies are not a perfect alternative, they certainly help sanctioned individuals receive funds. Surprisingly, the Russian Central Bank, recently, wanted to ban cryptocurrencies like China, but Vladimir Putin forced him to rethink and set him on a course Towards regulation – making crypto-to-crypto conversion a safer process.”

On the SPFS system, he said, “It is very local and expensive. There have been talks about integration with the Chinese, Indian and Turkish systems, but it will take some time, and these countries currently have no intention of associating their economic organizations with Putin’s fate. Defining it a few hours in advance will only apply to selected Russian banks, meaning that gas supplies to Europe are still guaranteed and this measure leaves the door open for tougher moves later.”

However, the researcher added, “On the other hand, Russia has huge reserves of foreign currency and gold, and it can withstand international ostracism for months, perhaps a few years.”

He explained that the biggest problem “is that Moscow was able in the past to strengthen relations with other countries. But after this attack, it is very difficult to find partners.”

He added that China is neutral, while Putin wants to rely on Putin, while Turkey closes the Bosphorus, India cannot replace Europe in terms of market dynamics.

He stressed that “unless Putin changes course and negotiates a viable solution, in the short term no one will want to associate with Russia. Even a rogue state needs friends.”

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