Tether (USDT), the stablecoin pegged against the US dollar, is surging against the Russian ruble. The stablecoin is up by more than 30% in just five days, and it has now reached an all-time high against Russia’s fiat currency.
The poor performance of the ruble comes from sanctions imposed against Russia by the US and its allies. Russia’s traditional financial market is crumbling as it reacts to these sanctions.
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USDT hits ATH against the Russian ruble
Data from Binance shows that with the Russian ruble facing increased inflation, USDT is winning against the currency. The USDT/RUB trading pair has soared to 105 rubles for the first time.
Before the sanctions were imposed and inflation hit the Russian financial market, the USDT/RUB trading pair was at 80 rubles. The first surge in the USDT/RUB was recorded on Thursday when the president of the Russian Federation, Vladimir Putin, announced a special military action into Ukraine.
The financial situation in Russia grew even tenser on February 27 when the European Commission announced the removal of Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT). The ruble made a steep decline after his announcement, and its spending power has depreciated by around 30%.
Russia countering inflation
The Russian central bank has been working to fight the rising rate of inflation of the ruble. On Monday, the institution announced it was raising interest rates from 9.5% to 20% to counter inflation.
“The increase of the key rate will ensure a rise in deposit rates to levels needed to compensate for the increased depreciation and inflation risks. This is needed to support financial and price stability and protect citizens’ savings from depreciation,” the central bank said.
The Russian government has also urged Russian-based companies to sell 80% of their foreign currency revenues due to the looming possibility of a total international financial exclusion.
Ukraine’s fiat is also not doing very well, and cryptocurrency exchange platforms are recording increased trading volumes. The volumes have increased by more than 200% as people rush to store their value in Bitcoin and other cryptocurrencies.
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