TL;DR Failure

  • Tether stablecoin rejects Ukraine’s request to ban doing business with Russia.
  • Tether claims to comply with the international sanctions imposed on Russia.
  • The cryptocurrency world continues to believe that the industry should be free from government intervention.

The cryptocurrency industry is highly influenced by global events. The same phenomenon was observed in the conflict between Russia and Ukraine. Since the outbreak of the war, global financial markets have experienced fluctuations in trends and price patterns. The cryptocurrency market is highly volatile given the rumors and global developments.

As the world took action against Russia, the United States and the Western world imposed several sanctions. The Russian ruble collapsed and the country's economy plummeted. At the same time, there are calls for cryptocurrency sanctions against Russia. Several experts expect that cryptocurrencies could be the way out for Russians in this situation. However, some blockchain companies and cryptocurrencies have expressed their displeasure with the decision. Tether has joined the same group of organizations.

Decentralization and Ukraine's call for a cryptocurrency ban

In the midst of the ongoing war, Ukrainian Prime Minister Mikhailo Fedorov has been active on Twitter. After establishing an official wallet, he has been asking for donations in fiat and cryptocurrencies. In addition, Fedorov has contacted the heads and influential figures of several cryptocurrency networks to denounce and ban Russian consumers.

Similarly, Fedorov recently tweeted directly to Tether and its Chief Technology Officer Paolo Ardoino. In the tweet, the deputy prime minister called on Tether to stop any dealings with the Russians to ensure peace. He also referred to the democratic world that has gathered to hurt Russia economically. Tether, however, expressed its displeasure with any such decision. The organization said it is complying with international economic sanctions against Russia and will not take any other measures on its own.

Previously, Fedorov had called on several Western companies to implement similar bans. He also contacted major cryptocurrency exchanges, such as Coinbase, Coinan and Kraken, to stop offering their services to their Russian consumers. But all these exchanges responded that such a step would go against the main concepts of cryptocurrencies and blockchain. Therefore, they did not take any such step.

Decentralization is one of the most important features of the cryptocurrency world. It promises that no regulator or government agency has any control over cryptocurrencies. Therefore, the call to ban Russian users is considered a violation of the principles of the cryptocurrency space. As a result, several companies, including Tether, are reluctant to make any such moves.

Authorities Continue to Review Tether

Tether is the most popular and most used stablecoin in the cryptocurrency world. Globally, it is used to link fiat currencies to cryptocurrencies. People use it to transfer money and get access to cryptocurrencies, such as Bitcoin and Ether. A large number of Russians also conduct similar economic activities through it. Recently, inflows into the Russian ruble have also increased significantly compared to last year. Tether seems to be the most used asset for cryptocurrency trading in Russia.

This is largely the reason why the Ukrainian Deputy Prime Minister has directly appealed to Tether. That said, Tether has several other battles to fight. It's been on the regulators' hit list for some time. The New York attorney general sued the company, complaining that it misrepresented its reserves and took advantage of users' funds. However, Tether settled the lawsuit. But the company did not admit or deny the claims against it. Several experts have also criticized Tether for not being fully backed by dollars and that it was a big scam.

Nonetheless, it remains to be seen how experts or Ukrainian authorities will respond to Tether's indirect answers. These are unlikely to have an impact on Tether's global usage. However, it still suggests that the cryptocurrency world is not in favor of imposing any cryptocurrency ban on Russia.