Russia: millions in the Tether (USDT) stablecoin traded on the day of the coup

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During the day of the failed coup attempt in Russia, the trading volume of the stablecoin USDT (Tether) with Russian rubles increased considerably. 

This was reported by Bloomberg citing data from CCData. 

Kaiko also found similar data. 

Trading volumes of the Tether (USDT) stablecoin

Analyzing the trading volumes of Russian rubles in USDT on Binance and Huobi, Kaiko found that on Saturday 24 June, all of a sudden they jumped well over 5 million, while on previous days they were less than 2. 

However, these are lower volumes than last year’s peaks, especially those in late February, i.e., in conjunction with the invasion of Ukraine. 

In other words in 2023 they were down a lot, but they peaked on Saturday. 

Instead, according to CCData’s analysis of more exchanges, daily trading volume on 24 June rose to over $15 million, whereas both the previous day and the day after had remained well below $5 million.  

The Russian ruble

To understand this trend, it is also necessary to analyze the trend over time of the exchange rate between rubles and dollars, because the ruble’s purchasing power has changed a great deal in recent months. 

At the end of 2021, with one ruble one could buy about $0.0132. 

With the outbreak of the war in Ukraine, the exchange rate plummeted to record lows, all the way below $0.01, although in the same way that the collapse was sudden, so was the rebound. 

In fact, by June last year it had risen as high as above $0.0180, hitting a high not seen in many years. 

However, this rebound did not last long either, as by the end of the year it was back to $0.0135. 

Starting in February 2023, it went back down significantly, to the point where it is now at its lowest level ever, excluding the February 2022 crash. In the last six months, it has gone from $0.0136 to the current $0.0117, a loss of 14%. 

Thus for several months now it has become less and less convenient to buy dollars by paying in rubles, even though holding dollars in the portfolio results in a much smaller loss than having only rubles. 

The USDT stablecoin (Tether)

Tether‘s USDT stablecoin is a crypto token, available on several blockchains, fully collateralized in US dollars (USD). 

Hence it always has the same value as USD, but it does not trade on classic fiat currency transaction platforms. 

In other words, it can exploit for instance the censorship-resistance of the Ethereum or Tron blockchains, making it totally immune to attempts by any government to be able to restrict or block its on-chain movements. 

There will always remain the possibility for governments to intimidate centralized exchanges to restrict or block its transactions, but once USDT tokens are withdrawn on a non-custodial wallet, the effective power of governments ends. 

As such, not it not only has the advantage, like the dollar, of losing less value over time relative to weak currencies such as the Russian ruble, but in addition it has the enormous advantage of not being censurable by any authority if moved to non-custodial wallets.

It is worth mentioning that non-custodial wallets for digital fiat currencies simply do not exist. 

The coup

Although there is still some doubt as to whether or not the one attempted by the Wagner Group was a real coup attempt, it evidently scared many Russians anyway. 

Indeed, there are reports of many oligarchs or well-off Muscovites fleeing the city in those days to seek shelter in safer places. 

Since the attempted coup was carried out on a Saturday, with the financial markets closed, and ended the next day, before the markets reopened, it is not possible to know what impact it might have had on the financial markets themselves, including that of the ruble. 

It is possible that it generated a lot of fear, so much so that the consequences were seen in the crypto markets. To be fair, hardly any cryptocurrency has lost or gained value as a result of the attempted coup, yet demand for USDT in rubles has increased. 

Indeed precisely on 24 June, the day of the attempted coup, USDT’s market capitalization rose from $83.20 billion to $83.28 billion, only to fall back to $83.22 billion on Monday. 

These are small changes, but significant in some ways. It currently capitalizes about $83.24 billion.