Statements by ECB President Christine Lagarde calling cryptocurrencies a “threat” to global security appear to contradict real-world data and expert opinion.

European Central Bank President Christine Lagarde has reiterated warnings that Russian individuals and companies are using cryptocurrencies to circumvent sanctions.

However, as of March 18, daily trading volume for ruble-denominated cryptocurrencies was just $7.4 million, down more than 50% from recent figures and a high of $70 million reached on March 7, according to data from Chainalysis.

This amount represents a small portion of the total volume of the global cryptocurrency market, since the total daily volume of Bitcoin usually fluctuates between $20 billion and $40 billion.

Lagarde’s Warnings in Detail

In a presentation at the Bank for International Settlements Innovation Summit on Tuesday, the crypto-skeptic Lagarde said that European financial authorities had seen that “ruble volumes in stable, in cryptocurrencies, right now [is at] the highest level that we’ve seen since maybe 2021.”

Lagarde did not single out the Russian government, stressing that, it was mostly Russian individuals and companies, which were turning to cryptocurrencies. However, she said that cryptocurrencies are “certainly being used as a way of trying to circumvent sanctions.”

Lagarde chimed in, “So is cryptocurrency a threat? Yes. Has it been a threat in the past? Yes, because when you look at a lot of the dubious transactions that are taking place, a lot of the criminal activity payments that are taking place, very often we can find some crypto assets involved.”

Other Views: Kaiko and Chainanalysis

Lagarde’s comments appear to be at odds with the data provided by Chainalysis and Kaiko, as well as with expert opinion. Jake Chervinsky, from the Blockchain Association, has said that Russia is unlikely to use crypto assets as a method of circumventing Western sanctions.

Data provided by crypto analytics firm Kaiko showed that ruble-to-USDT volume is down 86% from its peak of $38 million on March 7 to below $5 million on March 22. There was a spike in the run up to the war and spikes after, but volumes have returned to lower levels than seen for most of early February. That was before there was the imposition of sanctions.

On the contrary, cryptocurrencies are playing a role in helping Ukrainian refugees to flee the country. CNBC told the story of a Ukrainian refugee using the pseudonym “Fadey” who fled the war-torn nation with $2,000 worth of Bitcoin in an offline wallet, making it much easier for him to access his monetary assets once he got to safety in Poland.

Alex Gladstein, chief strategist at the Human Rights Foundation, said that trying to withdraw money from Ukrainian banks in the weeks leading up to the invasion was incredibly difficult, and highlighted the difficulties faced by refugees currently trying to access their funds from countries like Poland.

Donations made to Ukraine via crypto assets have skyrocketed in the last 3 months, with total daily donations made to Ukraine now standing at $100.9 million, according to data from Merkel Science. Without these, a significant number of people trying to escape from the conflict would have probably died in pursuit of their freedom.

By Audy Castaneda

“Most of the industry uses non-bank and often unregulated USD stablecoins. Now with this AUD stablecoin being issued by the Big 4 banks, the use case is much more compelling,” ZeroCap CEO Ryan McCall said.

ANZ Bank has launched a stablecoin pegged to the Australian dollar, reducing the risk associated with digital asset purchases and encouraging more customers to use crypto.

However, rival bank NAB also has its own stablecoin project expected to launch by the end of the year.

This the first time an Australian bank has issued a digital asset pegged to the value of the Australian dollar, and it may be the first time a major lender anywhere in the world has issued a stablecoin that has been used in an actual transaction.

Faster Transactions with ANZ

ANZ announced that it has handed over the Australian dollar stablecoin, dubbed A$DC, to the Victor Smorgon Group, a private wealth management firm that specializes in digital assets, through digital asset fund manager Zerocap.

Zerocap is a market-leading digital asset investment and technology company operating at the crossroads of crypto and traditional finance, providing products to investors and institutions around the world.

According to a March 24 report from the Australian Financial Review (AFR), the stablecoin will initially launch for institutional clients looking for a profitable on-ramp for crypto investments, though it is likely to open up to the retail market in the future as well.

In the pilot transaction, Victor Smorgon sent $22 million (Aus$30 million) from A$DC to Zerocap, an Australian digital asset fund manager that has partnered with ANZ to provide key infrastructure and advisory services.

The A$DC has already been used in a live transaction, allowing VSG to send $30 million to Zerocap in less than 10 minutes. This transaction usually takes several days.

The company’s decision to mint digital assets pegged to the Australian dollar follows the Reserve Bank of Australia’s announcement in 2021 that the growth of digital wallets could enable the exchange of RBA-backed tokens or digital forms of money, despite continued central bank pessimism about digital currency.

Fireblocks, a global custodian of digital assets, provided the infrastructure, while OpenZepplin audited the smart contracts. Chainalysis has signed on to help with compliance and regulatory obligations.

Optimism and Enthusiasm over A$DC

Speaking to Cointelegraph, Zerocap CEO Ryan McCall highlighted that the ANZ move is not only a “huge step” in mainstreaming crypto for Australia, but also globally, as it provides a legitimate example of a stablecoin backed by a traditional, fully regulated and compliant financial institution. He further claimed that, “Until A$DC, we didn’t have a bank-backed Australian dollar stablecoin, and most of the industry uses non-bank and often unregulated dollar stablecoins. Now, with this AUD stablecoin being issued by the Big 4 banks, the use case is much more compelling.”

Regarding the A$DC pilot, McCall noted that ANZ’s institutional division “was excited and fully committed to this project, to the broader ecosystem, and to delivering an end-to-end service and solution.” He declined to speculate on what might come next from the big bank.

While the transaction took place on Ethereum, he said ANZ would likely take their time weighing their options, as they would also consider Hedera-based distributed ledger technology (DLT).

By Audy Castaneda