Crimea, a disputed territory between Ukraine and Russia, is heading towards the creation of an international center for blockchain technology. Authorities in the Crimean Peninsula regard blockchain technology as a solution for states under international sanctions. Crimea was annexed by the Russian Federation in 2014 following a coup d’etat in Ukraine. The majority of international governments, however, continue to regard Crimea as an integral part of Ukraine.
Russian-Annexed Crimea Finds Crypto Niche: Evasion of U.S. Sanctions
Roman Kulachenko, the President of the Crimean Republic Association of Blockchain Technologies Investment told Russian news agency TASS that the public entity has proposed the creation of a university or courses to advance knowledge of blockchain technology in the peninsula.
“[It is proposed] to create a university or courses for blockchain specialists, including for the authorities. There are a number of states that, like the Crimea, are under sanctions – for example, South Ossetia and Abkhazia. We have the same problems and center will allow us to combine efforts and solve the problem.”
A number of countries have considered or already started using cryptocurrencies as a tactic to circumvent international sanctions against them. Iran, for example, has recently been ousted from SWIFT’s financial banking system as part of the US-led sanctions. Without SWIFT’s system, its economy will face increased difficulty to settle its international deals. In response, the authorities in Iran have accelerated the development of their state-backed national digital currency.
Sanction-ridden Iran is a typical target country, according to Kulachenko description. The Islamic republic may eventually send a number of IT experts to study blockchain in Crimea once the proposed university becomes a reality. Russia, which is also under international sanctions since the annexation of Crimea in 2014, has also been in talks for the creation of crypto ruble in order to evade sanctions. The plans of Russia and Iran are no secret. An Iranian MP has explicitly said that cryptocurrencies should be used to work around returning economic sanctions from the United States.
North Korea has also made the news for ramping up the use of cryptocurrencies to evade US economic sanctions. The pariah country plans to launch its own digital currency to facilitate the opening of online accounts under the guise of a non-adversarial nation. The method would include using anonymous communication to conceal the user’s locations and usage on the internet. Independent financial analysts believe the DPRK may create its own wallet services so they can to move funds to European-based accounts in order to make their way to European exchanges that have relationships with U.S.-based banks.
Economic sanctions are increasingly being used to promote the full range of American foreign policy objectives. The university or courses being proposed by the Crimean blockchain association is likely to find great demand from targeted nations.