Biden Imposes Sanctions On Russia, Bitcoin Soars To $39,500.

Bitcoin recovered most of its losses earlier in the day when President Joe Biden said that the United States will restrict Russia’s ability to trade in Western currencies.

President Joe Biden announced in a press conference Thursday that the United States will ban five of Russia‘s largest banks and freeze all assets they possess in the United States worth more than $1 trillion.

Earlier Thursday, UK Prime Minister Boris Johnson adopted similar sanctions, freezing the assets of all major Russian banks and shutting them off from the UK’s financial systems, according to the Associated Press. The prime minister also wants to prevent Russian corporations and the Russian government from soliciting funds on British markets, a proposal that Biden reiterated during his news conference.

The blockade is part of a set of measures agreed upon by US and G7 leaders to try and curb additional moves by Russian President Vladimir Putin following his order to send troops into Ukraine — an escalation of milder sanctions implemented earlier this week.

Despite repeated rumors stating that Russia may be kicked out of the international payment system Swift, Biden stated that there are no plans to take that step at this time. According to the Financial Times, the US president’s statements contrast with Johnson’s, who is pushing “very hard” for Russia to be withdrawn from the Swift payment system.

Biden said:

“The sanctions we have imposed exceed Swift,”

Despite the fact that Russia has not been removed from Swift, Biden stated that the US and G7 leaders have agreed to “limit Russia’s ability to do business in dollars, euros, pounds, and yen.”

Following Biden’s comments, Bitcoin rebounded $39,000 in a swift rally after falling below $35,000 Thursday morning.

Biden went on to say that the US is also punishing Russian commerce in an effort to “cut off half of Russian high-tech imports,” limiting the country’s access to products and technology.

Russia’s invasion of Ukraine has resulted in a “complete rupture” in ties between the nation and the United States, according to Biden.

The United States will only support Ukraine with economic sanctions and supplies for the time being, as Biden has stated that the US will only send soldiers “if Russia moves into NATO countries.”

According to Biden, the US has sent and will send more soldiers to NATO nations around Ukraine.

Despite not taking the Swift method, imposed penalties attempt to hinder Russia’s capacity to trade on a global scale.

However, there is skepticism about the effectiveness of Western sanctions as alternative payment systems such as Bitcoin and cryptocurrencies become more extensively utilized and could emerge as new instruments for Russians and their oligarchs to use, according to Bloomberg.

Bitcoin differs from typical payment systems in that it sees and treats all users equally, making it an effective tool for individuals under the observation of a totalitarian state, for example. However, as a tool, it may also be used by states barred from Western payment rails.

Matthew Sigel, head of digital assets research at investment manager VanEck, told Bloomberg:

“Neither dictators nor human rights activists will encounter any censor on the Bitcoin network,”

Citizens frequently incur the expenses of geopolitical events in which international leaders seek increasing influence and authority. In today’s digital and financialized world, monetary difficulties grow more visible as both attackers and victims turn to the financial system – either to limit or seek sanctuary.

Bitcoin is a life raft for everyone who is subject to monetary constraints across the world, regardless of their position in global geopolitics. Bitcoin, and the decentralized payment system, in general, allows individuals to keep their capacity to exchange monetary value regionally or internationally while remaining immune to the policy tide that affects traditional systems.

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Patrick

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