Exchange crypto for dollars? Exchange offices on Russia's streets are booming

 

A growing number of currency exchange bureaus can be found on the streets of Russia, exchanging US dollars for crypto – a risky proposition. 

What's up, why are Russians trading crypto on the street?

In the Russian Federation there have been restrictions on cash withdrawals since March 9, 2022. The central bank prevented residents from withdrawing more than US$10,000 or the equivalent in euros . At the same time, withdrawals were possible only if the money was already in the account before March 9, 2022.

The lifting of this restriction is currently scheduled for March 9, 2023. However, Russian citizens have no guarantee that the central bank will lift the restrictions after that date. The deadline had previously been set for September 9, 2022, but in August the Russian authorities extended it by a further six months.

The situation is precarious

Many Russian citizens have their cash “frozen” in their bank accounts, but this is just one of many critical circumstances:

Importing cash in US dollars and euros is banned – these restrictions are further exacerbating cash shortages.

Many Russian banks are decoupled from the international telecommunications network SWIFT . The customers of these institutes can therefore not transfer their money abroad. As an “alternative”, banks offer their customers to exchange US dollars and euros for rubles. However, the exchange rate leaves a lot to be desired.

Credit institutions of the Russian Federation have introduced fees for storing non-cash means of payment .

Forex holders run the risk of being sanctioned by the National Clearing House (KCK) .

Stablecoins as a way out of the situation

For many, crypto offers a way out of this difficult situation thanks to stablecoins . Among them, the leader by market cap – Tether (USDT). This coin can be bought anonymously, transferred abroad without restrictions and exchanged for fiat. But the Tether rate is not only more stable for Russians, but also more profitable than a cashless US dollar.

For example, at the time of publication of this article, one US dollar is sold for 59 rubles in Sberbank. However, on the Binance P2P platform, the value of one USDT at the same time is 64 rubles.

Due to growing interest in cryptocurrencies, the EU banned the operation of wallets with ties to the Russian Federation in early October 2022 . However, few trading platforms and crypto services are willing to implement such restrictions .

Despite EU attempts to restrict Russian access to cryptocurrencies, stablecoins are emerging as a real substitute for their national currency for many . Meanwhile , Russian citizens are showing strong interest in the new financial instrument . More and more exchange offices are popping up in Russian cities, where transactions with digital assets can be carried out.

Crypto exchange offices on Russian streets

The seller said the hawkers would be willing to buy USDT in exchange for US dollars, although the latter are apparently in short supply locally . The transaction proceeds as follows:

The USDT owner sends the stablecoins to the address provided by the buyer.

The exchange office then transfers US dollars to the seller.

Exchange office representatives promise to calculate the exchange rate based on Binance P2P. However, they refuse to process the transaction through the platform itself.

How about security?

Unfortunately, the crypto-monetization system used by these exchange offices is extremely insecure. There is no guarantee that the exchange office will actually send the US dollars to the Russians after the transaction .

It is difficult for the victim to prove guilt in such a case. Most of the time, the sellers get away with it without any problems.

Exchange crypto for fiat: This is how it works safely

Currently, Binance's P2P platform does not offer a sell option of USDT for US Dollars. Therefore, exchange offices on the street seem an attractive proposition.

Of course, the system of exchanging cryptocurrencies for fiat on a P2P platform is much safer than transactions with street exchange offices and here is why:

A P2P platform acts as a guarantor of security. The platform blocks the seller's cryptocurrency and transfers it to the buyer's account only after the buyer confirms receipt of the desired currency.

In the event of a dispute, representatives of the P2P platform can help to find a solution.

Fortunately, Binance is not the only P2P market . Similar offers can also be found on P2P platforms of many other cryptocurrency exchanges, including Bybit.

However, most only offer the exchange of large amounts - that means several thousand US dollars.

Exchange platforms for crypto

Working with these exchange offices carries a high level of risk , even if they offer a better exchange rate than other platforms. You can easily lose your money doing this.

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