Cryptocurrencies will not be able to help Russia fight Western sanctions restricting international financial transactions, RBC writes, citing a report by rating agency Moody’s.

The imposition of international sanctions against Russia has raised questions about whether cryptocurrencies, including bitcoin, can be used “to circumvent sanctions and restore the rights of Russian citizens and the government’s ability to at least partially conduct financial transactions,” Moody’s analysts wrote, concluding that cryptoassets are unlikely to be an effective solution for these purposes at this point.

According to experts, one of the obstacles is the limited size and low liquidity of the cryptocurrency market in Russia. On the exchange, the liquidity of a pair (ExmoRUB) is about $200,000. On OTC trading services, which are used to hide transactions, the so-called mixing services, the liquidity is about $30 million per day. At the same time, the authors of the study note that, according to the U.S. Treasury Department, Russian financial institutions conduct international transactions worth about $46 billion daily, 80% of which are made in U.S. dollars.

In addition, regulated crypto exchanges must comply with the requirements of “anti-money laundering” legislation, which allows tracking illegal transactions, the report said:

“A centralized digital asset marketplace with well-established verification and appropriate registration processes will be able to track and disable blacklisted accounts. Once a transaction is flagged, law enforcement can track its history and monitor its movement.”

This factor Moody’s cites as another reason why the ability to evade sanctions is limited.

Experts also note the sanctions against some platforms. On April 5, the U.S. Treasury Department imposed sanctions against the largest darknet platform Hydra Market, working for the Russian-speaking audience, and against the cryptocurrency exchange Garantex Europe OU. The latter is registered in Estonia, but, according to the U.S. Treasury Department, it operated mainly from Moscow and St. Petersburg. According to the agency, transactions on this platform amounting to over $100 million are linked to criminal activity and darknet markets. The Finance Ministry release also notes that approximately 86% of the illicit bitcoins received by Russian virtual currency exchanges in 2019 came from Hydra.