Here¡¯s Why Russia Is Turning To UAE & China For Help Amid War

With the third week of the Ukraine-Russia war going on, the latter¡¯s economy is on the brink of collapse. And now, both the government and citizens are resorting to all possible ways to survive and safeguard the leftover money which they have.

Russians Unloading Billions Of Crypto In 'Safe Haven' UAE

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Also Read: From McDonald's To Rolls-Royce: Companies That Stand To Lose The Most From Russia's War On Ukraine

Crypto firms in the UAE are being flooded with requests to liquidate billions of dollars of virtual currency, as Russians seek a safe haven for their fortunes, according to company executives and financial sources, as reported in AlJazeera.

As per the report, sources stated that some clients are using cryptocurrency to invest in real estate in the UAE, while others want to use firms there to turn their virtual money into hard currency and stash it elsewhere.

Dubai, which is the Gulf region¡¯s financial and business centre and a growing crypto hub, has long been a magnet for the world¡¯s ultrarich and the UAE¡¯s refusal to take sides between Western allies and Moscow has signalled to Russians their money is safe there, as per AlJazeera.

A financial source in the UAE confirmed that Russians were buying property in Dubai, using crypto as a way of getting their money out of other jurisdictions and into the Gulf state.

But major exchanges such as Coinbase Global Inc and Binance have reportedly said that they are taking steps to ensure that crypto is not used as a vehicle to evade sanctions, and they collaborate with law enforcement on the issue.

Amidst all this, the UAE was put on a ¡°grey list¡± this month for increased monitoring by financial crime and money laundering watchdog the Financial Action Task Force (FATF).

Russian Govt Counting On Ties With China Amidst Frozen Reserves

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Yesterday, Russia said that it was counting on China to help it withstand the blow to its economy from Western sanctions, which it said had frozen nearly half of its gold and foreign currency reserves, as per Reuters.

Finance Minister of Russia, Anton Siluanov, reportedly said ¡°We have part of our gold and foreign exchange reserves in the Chinese currency, in yuan. And we see what pressure is being exerted by Western countries on China in order to limit mutual trade with China. Of course, there is pressure to limit access to those reserves."

He added, ¡°But I think that our partnership with China will still allow us to maintain the cooperation that we have achieved, and not only maintain but also increase it in an environment where Western markets are closing."

A month ago, the Russian Finance Minister had said that the country would be able to withstand sanctions thanks to abundant reserves and was even considering offering Eurobonds to foreign investors once the market volatility subsides.

And yesterday, he said the sanctions had frozen around $300 billion out of $640 billion that Russia had in its gold and forex reserves, adding that Russia will fulfil its state debt obligations and will pay roubles to its debt holders until the state reserves are unfrozen.

However, with sanctions against Russia rising day by day, it remains to be seen whether Russia is able to continue to withstand the economic turmoil.

Also Read: India's Biggest Public Sector Bank SBI Stops All Transactions With Sanctioned Russian Entities

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