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Russia sanctions could drive more people to crypto

For investors, these are unprecedented times.

The world has been rocked by a deadly pandemic. Europe is at war; Russia in an economic chokehold. The United States is experiencing its highest inflation in 40 years and it’s likely to get worse. Currency and equity markets are gripped by a scale of volatility unseen in years. The status quo of the traditional geopolitical order faces a crisis. And commodities are trading like meme stocks.

Read Nordic American Tankers could profit from Russia sanctions

Enter cryptocurrency – a $3 trillion market that promises to liberate people from the grip of the international financial system.

Cryptocurrencies have become increasingly mainstream. Five years ago, the market was valued at just $14bn – a fraction of what it is today.

The US government, among others, is trying to get in on the digital asset boom, seeking to regulate and reinvent a sector operating largely out of its reach.

US President Joe Biden on Wednesday signed an executive order requiring the government to assess the risks and benefits of creating its own central bank digital currency (CBDC).

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While taking inspiration from cryptocurrencies and following some of the same principles, CBDCs are not regarded as crypto as they are regulated by a central authority. The White House, besides imposing crippling sanctions on Russia, will also look into mitigating crypto risks for consumers and leading economic and technological competitiveness and innovation in the sector.

China debuted its version of a CBDC, the digital yuan, during the Beijing Winter Olympic Games last month.

According to the Pew Research Center, 16 percent of Americans have dabbled in trading, using, and investing in cryptocurrencies. That figure is likely to rise considerably, crypto industry figures told Al Jazeera.

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“I think we may refer to 2022 as the year of the big catalyst for crypto because what governments did is actually force adoption,” Ran Neuner, host of CNBC’s Crypto Trader, told Al Jazeera. “They put people in a position where they had no choice but to flee to the other system.”

Russia sanctions could drive more people to crypto, analysts say  Al Jazeera English

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