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Russia’s invasion of Ukraine has fueled a rapid embrace of crypto technology within the country’s borders, according to a new study.
Russia is, by a wide margin, the top user of crypto among European nations, according to crypto forensic firm Chainalysis.
Russia has seen $379 billion in crypto inflows between July 2024 and June 2025, a year-over-year increase of more than 48%, the firm found. That placed the country ahead of the region’s longtime leader, the UK, which saw $273 billion in inflows — a relatively modest 32% increase from the year prior.
“I strongly believe that the growth and adoption of crypto assets in Russia has been driven by the war and sanctions regimes,” Matthias Bauer-Langgartner, Chainalysis’ head of European policy, told DL News.
“Crypto assets are not just casually used in order to evade sanctions. There is a real strategy, a long-term strategy behind them.”
The war’s effect on crypto usage with Russia is twofold. First, the Russian government has turned to digital currencies in order to skirt international sanctions, which have limited the country’s access to US dollars and to global payment systems such as SWIFT.
Second, those sanctions have battered the ruble, and inflation-weary Russians are turning to crypto and DeFi in order to protect their savings, according to Bauer-Langgartner.
Russia is subject to a record 19 sanctions packages from the European Union. The most recent, issued in September, targets Russia’s use of crypto.
“As evasion tactics grow more sophisticated, our sanctions will adapt to stay ahead,” European Commission President Ursula von der Leyen said in a statement last month.
“Therefore, for the first time, our restrictive measures will hit crypto platforms. and prohibit transactions in crypto currencies.”
In 2024, Russian lawmakers legalized the use of crypto for international payments. A month later, President Vladimir Putin signed a law legalizing crypto mining.
“Putin is now a vocal cryptocurrency advocate,” the think tank Rand noted in a recent report. “At December’s annual Russia Calling investment forum, he claimed that ‘no one can prohibit the use of Bitcoin.’”
The report cited several examples of Russia’s newfound affinity for crypto, including an alleged scheme in which Rosatom, a state-owned nuclear technology company, laundered more than half a billion dollars in stablecoins for Russian clients who were trying to evade US sanctions and acquire “sensitive US technology.”
Indeed, transfers of over $10 million increased 86% in Russia, according to Chainalysis data. That’s double the 44% growth the firm saw in the rest of Europe during the same period.
Even as Russian firms increasingly use crypto for international payments, the use of crypto is banned within Russia.
“The Russian government is actually not very keen for crypto adoption within the larger population, because it’s something that can hardly be controlled,” Bauer-Langgartner said.
That hasn’t stopped regular Russians from turning to digital assets to protect their savings.
While inflation has slowed this year, it remained elevated at 8.2%, the Russian central bank said in September.
“Because there is this ban, we can see a lot of DeFi growth, where people go to no-KYC exchanges, peer-to-peer platforms, or so-called instant exchanges, where they can quite easily link their Russian, sanctioned bank account to a crypto trading platform,” Bauer-Langgartner said.
DeFi activity is now three-and-a-half times larger than it was in mid-2023, according to Chainalysis data.
Despite the ban on retail use of crypto, Bauer-Langgartner believes the Russian government has largely turned a blind eye to Russians’ use of tools such as instant exchanges.
“It’s not a massive priority amongst the many things the Russian government is currently thinking of,” he said. “Enforcement could still be enhanced, and it potentially will be in the future.”
Just this month, however, Russian Deputy Finance Minister Ivan Chebeskov appeared to suggest the Russian government should move to accommodate retail crypto use.
“We have millions of citizens, by some estimates 20 million, who use cryptocurrency for various purposes,” he said, according to a report from Russian news agency Tass.
“Since they are already using it, we need our own infrastructure to protect citizens and to have both economic and technological benefits.”
To be sure, crypto remains a small part of Russia’s sanctions evasion efforts.
Crypto assets aren’t liquid enough to power one of the world’s largest economies, according to Bauer-Langgartner. Additionally, they’re easily traced, making it simple for centralized stablecoin issuers to freeze suspect funds at the request of US and European law enforcement agencies.
“These analytical capabilities that we have and constantly develop, they have a massive effect on the usability of funds with sanctions exposure,” he said.
“Regulation in Europe and the US is working, because it gives you a tighter net and a real blocker in being able to onboard funds coming from Russia.”
Aleks Gilbert is DL News’ DeFi Correspondent based in New York. You can contact him at aleks@dlnews.com.
