The post How EU Sanctions on Russia Are Driving Italian SMEs Toward Crypto Solutions appeared first on Coinpedia Fintech News
It was in 2014 that the European Union imposed economic sanctions against Russia for the first time; it came as a political reaction to Moscow’s annexation of Crimea. When Russia launched a full-scale invasion of Ukraine, the EU intensified its sanctions in order to deter the country from launching more aggressive military actions.
Have the EU sanctions affected Russia? There is no clear data to suggest that Russia has faced huge losses due to the sanctions. However, a revelation by Ferdinando Pelazzo, the president of the Italian-Russian Chamber of Commerce, indicates that the sanctions have created massive turbulence in the Italian Small and Medium-Sized Enterprises sector. Meanwhile, some crypto experts see an opportunity in this disrupted global financial structure. Why? Read on to know more!
How European Sanctions Are Impacting Italian SMEs?
The Italian SME sector has a close relationship with the Russian market. Certain Italian SME products, particularly in the footwear, clothing, and home furnishing sectors, have huge demand in Russia. Pelazzo claimed that the Italian SMEs are struggling to maintain their presence in the Russian market. The easiest trade route from Italy to Russia is through the Baltic countries. The Italian-Russian Chamber of Commerce president alleged that, due to the EU sanctions, Italian companies sending goods to the Russian market have no choice but to opt for the expensive trade route of Turkey.
EU Sanctions: The Struggle of Payment Systems
Many financial institutions ceased their Russian operations follwing the release of the directives of the European Central Bank. Pelazzo pointed out that the sanctions have made it nearly impossible for Italian exports to process payments in Russia.
Russia Adapts While European SMEs Suffer
Indicating that it is small European businesses that suffer due to the sanctions more than Russia, Pelazzo stated that Russia has found alternative payment systems to mitigate the impact of the EU sanctions.
How Will It Impact the Crypto Market?
As the EU sanctions continue to cripple traditional payment systems, European SMEs might turn to cryptocurrencies as an alternative for conducting cross-border transactions. If this global traditional economic disruption remains, the demand for decentralized financial systems could rise.
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