Russia: Wagner's 'stab' boosts cryptocurrencies

It’s quite a paradox! The man who shook the Kremlin does not come from the opposition camp, nor from outside. Yevgeny Prigozhin is a very close friend and Vladimir Putin’s “former Swiss Army knife”. He dared to challenge the powers that be with a short-lived rebellion backed by some 5,000 men. A situation quickly resolved by Putin, and one that has been emulated by Russian crypto-enthusiasts.

Tether, the great winner of the Wagner rebellion

Russia, once hostile to cryptocurrencies, changed its mind as Western sanctions took their toll on its economy. First, it announced plans for a platform accepting multiple CBDCs. Then, the Kremlin gave banks the green light to develop suitable crypto products.

Russian adoption of cryptocurrencies has thus continued to grow. As recently as yesterday, June 26, Fortune reported some surprising data on cryptocurrency trading on the only exchanges that accept such transactions.

In fact, the volume of ruble-denominated Tether exchanges increased against the backdrop of the brief revolt led by the Wagner group.

Data taken from CCData show that trade between rubles and USDT was just $4 million last Saturday. The following day, this figure was almost multiplied by 4: to be precise, 15 million dollars.

What’s behind all this upheaval?

There’s only one explanation for the flight of frightened Russians to Tether’s USDT. It’s the attempt to destabilize the country perpetrated by Yevgeny Prigozhin and his highly experienced militia. With a convoy of 5,000 mercenaries armed to the teeth, the Wagner group had arrived very close to Moscow before stopping its maneuvers.

After all, negotiations did take place with Putin and Lukashencko (President of Belarus). Bloodshed was narrowly avoided on occasion. But the image of the Russian army suffered a few scratches.

To justify an attempt to disobey Vladimir Putin, his now ex-friend put forward a number of reasons: abandoning his troops in the Central African Republic and Mali, disagreements with warlords in the Ukraine, efforts against any attempt to destroy the Wagner group, revelations of security issues in Russia, and so on.

Stablecoins, crisis (crypto)currencies?

Firstly, it’s worth noting that the end of the short-lived crisis in Russia saw trading between the ruble and Tether fall to $3 million.

However, similar crises have always favored increases in trading volumes between the ruble and USDT-type stablecoins. At the start of the invasion of Ukraine, for example, exchanges were valued at up to $37 million.

The devaluation of the Russian ruble due to economic sanctions would push people to adopt stablecoins.

And it’s not just in Russia that these cryptocurrencies are catching on. Other countries stunned by economic crises, such as Argentina and Venezuela, are also taking to them.