Russia has overtaken the United Kingdom to become Europe's leading country in cryptocurrency adoption, driven by efforts to evade Western sanctions and hedge against inflation following the invasion of Ukraine. According to Chainalysis data, the country received $379 billion in crypto inflows from July 2024 to June 2025, a 48% year-over-year increase. DeFi activity in Russia has grown three-and-a-half times since mid-2023.
The ongoing war in Ukraine and subsequent international sanctions have accelerated Russia's embrace of cryptocurrency, positioning it as the top European nation for crypto usage. Chainalysis, a crypto analytics firm, reported that Russia saw $379 billion in cryptocurrency inflows between July 2024 and June 2025, up more than 48% from the previous year. This figure surpasses the UK's $273 billion, which grew by a more modest 32%. Other European countries trailed behind, including Germany with $219 billion and Ukraine with $206.3 billion.
The surge stems from two main factors: government efforts to bypass sanctions restricting access to US dollars and global systems like SWIFT, and ordinary Russians seeking to protect savings amid economic pressures. Inflation stood at 8.2% in September, according to the Russian central bank. "I strongly believe that the growth and adoption of crypto assets in Russia has been driven by the war and sanctions regimes," said Matthias Bauer-Langgartner, Chainalysis' head of European policy. He added, "Crypto assets are not just casually used in order to evade sanctions. There is a real strategy, a long-term strategy behind them."
Institutional activity has boomed, with transfers over $10 million increasing 86% year-over-year—nearly double the 44% growth across the rest of Europe. DeFi usage, which includes blockchain-based trading and lending without traditional intermediaries, is now three-and-a-half times higher than in mid-2023. Russians are turning to no-KYC exchanges and peer-to-peer platforms to link sanctioned bank accounts to crypto trading.
Russia legalized cryptocurrency for international payments in 2024 and crypto mining shortly after, with President Vladimir Putin emerging as a vocal advocate. "No one can prohibit the use of Bitcoin," Putin stated at a December investment forum. However, domestic retail use remains banned, classified as taxable property but not legal tender. The European Union responded with its 19th sanctions package in September, targeting Russian crypto platforms for the first time. European Commission President Ursula von der Leyen said, "As evasion tactics grow more sophisticated, our sanctions will adapt to stay ahead."
Despite the growth, Bauer-Langgartner noted that crypto's role in sanctions evasion is limited by its traceability and illiquidity for a major economy. Russia's ruble-denominated stablecoin, A7A5, launched in February, has aided cross-border payments by qualifying as a digital financial asset.