Central Banks Digital Currencies: what may it bring for banks?

18-05-2022 | Carlo de Meijer | treasuryXL | LinkedIn |


The future of money is digital, according to a new global CBDC index from Price Waterhouse Cooper (PwC). This year’s Index shows that central banks are “ramping up” activity in the digital currency space. It is estimated that more than 80% of central banks worldwide are considering launching a central bank digital currency (CBDC), which some have already done so.

Before introducing their CBDC there are however many challenges and considerations to cover, ranging from cybersecurity and privacy concerns to the impact on financial markets and legislation. But the most fundamental one is: what may CBDCs bring for banks? Should they worry or is this an opportunity for them?

Introducing CBDCs may pose potential risks to the banking sector. How are central banks acting to mitigate those risks. What design is most suited for banks? And if well designed how would the future of banks look like.


Challenges and risks for banks

Despite having potential advantages, there are also various risks associated with CBDCs that could harm financial stability if not well designed. According to research, risks to financial stability depend on the take-up or rate of adoption, of a CBDC as well as bank funding, lending and resilience. If take-up is too fast, it could throw the existing financial and banking systems out of balance, a recent BIS report says.

Banking system disintermediation
The question of whether – and to what extent – CBDCs could pose risks to financial intermediation is central to the present debate. With the ability to provide digital currency directly to its citizens, it is widely viewed that if not well designed CBDCs could crowd out bank deposits and payment activities, as depositors would shift out of the banking system.

Bank runs
But there is also the possibility of digital bank runs. CBDCs would provide consumers access to a safe asset that – unlike cash – could potentially be held in large volumes, in the absence of safeguards, and at no cost. In the event of a banking crisis consumers could withdraw their savings from commercial banks and put them into safer CBDCs. If a bank has problems (be they technical or financial), customers with easy access CBDC wallets could trigger a run on the bank even if the problems are temporary. Such runs could even be self-fulfilling, leading to savers reducing their bank deposits and thereby amplifying volatility in normal times too.

Increase in funding costs
And there is the prevailing fear that the use of any CBDC would require a shift of funds out of bank deposits and into digital cash. Should CBDCs rapidly replace bank deposits, they could reduce banks’ ability to lend, leading to instability in the financial system. Without bank deposits, banks won’t have the funds to issue loans that help them make money. If customers move their money from commercial banks to CBDCs then this reduction in the deposits at commercial banks could make the cost of funding loans more expensive with knock-on impacts to the availability of credit for retail and corporate customers.

Weaken balance sheet position
While customers may deem the safety, liquidity, solvability, and publicity of CBDCs to be more attractive, this may weak the balance sheet position of commercial banks. An unconstrained CBDC could potentially have an impact on the funding structure of banks, with potential implications for financing conditions.

CBDCs could thereby interfere with the way in which nowadays credit lines and deposits complement each other. This would make funding more unstable and costly, reducing a bank’s profitability. Replacing deposit funding with central bank funding could exacerbate frictions. Greater recourse to central bank credit could increase collateral scarcity. This could affect banks in asymmetric ways, with a potentially greater impact on those that rely more on deposit funding. And the impact on yields could vary across the different segments of the yield curve. Research shows that the magnitude of these effects depends on the take-up of the CBDC, which in turn hinges on design features such as payment convenience and remuneration.

CBDCs should be carefully designed

According to research by various international financial organisations including IMF and BIS most central banks are committed to minimizing the impact of CBDCs on the stability of the financial system. It is for this reason that they are moving slowly on CBDC adoption and experimenting with CBDC design to mitigate them.

It is a growing conviction amongst central banks that the introduction of CBDC should follow a set of core principles in both design and implementation, that should minimise the impact of CBDCs on financial disintermediation, system-wide bank runs and credit provision as well as limit competition between CBDCs and bank deposits.

One of these main principles is that CBCDs must not harm. In particular, they should not become a source of financial disruption that could impair the transmission of monetary policy in the euro area. For that central banks worldwide have an intense dialogue with various parties in the payments market, technology providers and the general public.


Collaborative partnership public-private sector

Introducing a CBDC is a complex process requiring appropriate resources and capacity. Banks are recognizing that the adoption of CBDCs could enhance the efficiency, resilience, and effectiveness of money flows and capital markets, but for a CBDC to be a valuable instrument, it must be part of a collaborative partnership between public and private sectors, to ensure successful adoption, or the building of additional features.

Any CBDC ecosystem should involve the public and private sectors in a balance, in order to deliver the desired policy outcome and enable innovation that meets users’ evolving payment needs. Central banks that contributed to the BIS report envision CBDC ecosystems based on a broad public-private collaboration, or a “tiered system” where the core roles are assigned to the central bank and other more public-facing roles to private financial institutions like banks.


Two-tier structure

The risks that CBDCs may pose to bank intermediation depend crucially on the choices that central banks make. Most central banks are opting to follow the current two-tier structure which places central banks at the foundation of the payment system, while assigning end-user-facing activities to financial institutions and other payment service providers (PSPs). This cooperation has proven itself over many decades.


It is key in this relationship that central banks issue the value of CBDCs and grant its authenticity, while commercial banks as well as financial services providers issue the wallets that handle CBDC and are responsible for the application. This would allow central banks to benefit from the experience of intermediaries – especially banks – in areas such as onboarding of consumers and anti-money laundering checks. And it may preserve the role of financial intermediaries in providing front-end services.

Commercial banks are the best players to take on a customer-facing role in the CBDC ecosystem and be responsible for the distribution – just as they are now with physical money. Central banks can therefor entrust financial intermediaries with distributing CBDCs, while central banks take care of macroeconomic aspects, such as money supply management and currency stability. The commercial banks are thereby responsible for services such as customer advice, lending or corporate financing. But more than that, since CBDC offers the opportunity to develop new financial products and services.


CBDC design features and tools

Careful design and policy considerations will be crucial in allowing to maximise the benefits of CBDCs and manage any unintended consequences, thereby underpinning trust in CBCDs. So it is important to undertake in-depth research regarding the tools and design features, which are found to be strong drivers of the potential demand for CBDCs, that could be introduced to limit such risks.

To be successful, CBDCs will need to add value for users, support competition rather than crowd out private innovation, and avoid risks to financial intermediation. Central banks thereby need to strike a balance so that the digital euro is not “too successful” – by limiting its use as a form of investment – but is “successful enough” – by avoiding such restrictions becoming inconvenient and by ensuring that the CBDC adds value for those using it.

CBDC Design options

The BIS report lays out a number of design options that could help control CBDC take-up and the crowding out of banks including setting holding and transactional limits on CBDCs, and considering different ways of remuneration.

There are various options available including the issue whether to pay out interest. This as a way to limit competition between their and existing bank deposits. The curbs are designed to avoid heightening the risk of bank runs and crowding out depository banks.

Another option is implementing quantitative limits. These latter are also meant to cap competition with depository banks, and can entail limits on CBDC balances that people can hold.

Not interest bearing CBDC

Research from the BIS and the IMF on the various CBDC projects world wide shows that most are not interest-bearing like cash, which makes CBDCs useful, but not as attractive for savings as traditional bank deposits, to ensure they do not compete.

If central banks issue a remunerated interest-earning CBDC it would prove to be a more attractive substitute for cash, low interest-bearing deposits or other cash-substitutes, risking rapid emptying of deposits.

Tiered remuneration
Another option would be to make remuneration on CBDC holdings less attractive above a certain threshold. Up to that threshold, CBDC holdings would never be subject to negative interest rates, ensuring that it is a means of payment that is as attractive as cash. Above that threshold, however, remuneration would be set below the main policy rate in order to reduce the attractiveness of the CBDC as a store of value relative to bank deposits or other short-term financial assets.

Soft limit
One way round this is to set a soft limit with penalties if the upper limit is exceeded: for example, a negative interest rate on all amounts above the upper limit or a penalty amount for every day the limit is exceeded. This would work for temporary balances (for example between the payment of wages and the day the rent is paid) but may not be effective in safeguarding against a bank-run.

Setting a ceiling on individual CBDC holdings
There are also a number of active CBDC projects that have put ceilings on the amount of holdings that a customer can hold in CBDC, to prevent sudden large outflows of bank deposits into CBDC, thereby mitigating undesired effects on monetary policy and/or financial stability. But such a cap would risk reducing the scale and scope of CBDC use and, its usefulness as a means of payment. To address this issue, solutions linking CBDC accounts to private money accounts could be implemented, allowing large(r) banking to be made. This would require funds in excess of users’ limits to be redirected to or from their commercial bank accounts.

Another alternative could be expiring money. Any CBDC tokens loaded onto a wallet would need to be spent within a time-period otherwise they would expire. While this could ensure that any money loaded on a CBDC wallet is for day to day spending it however could penalise people who are unable to use their wallet.

Ease liquidity conditions
Central Banks could also ease liquidity conditions, for instance by providing abundant and favourable central bank funding if required to limit strains from possible changes in the composition of bank funding.

ECB and IMF research: findings

ECB and IMF analysis suggests that the impact on the aggregate banking sector in normal times could be manageable overall, subject to safeguards. Adequately designing and calibrating CBDC safeguards could help to counteract the adverse effects of CBDCs on bank run and mitigate potential risks to bank intermediation.

All CBDCs that are currently circulating, either as official currency or through a pilot, are designed with restrictions that limit the competitiveness of CBDC versus bank deposits. By limiting the amount of CBDCs that can be held and not offering interest on them, they don’t compete with bank deposits.

A notable finding is that a CBDC could itself be used as a tool to counter the risks of bank runs. This is because it could provide real-time information on deposit flows, complementing the information on liquidity available to supervisors every day. This would enable the central bank to respond more swiftly if needed, which in turn would help to stabilise expectations by increasing depositor confidence.


How should financial institutions react

It is especially important for financial institutions to understand where central banks are with digital currencies, because ultimately CBDCs will start flowing through the payment system and start to hit bank balance sheets.

Careful consultation with central banks is critical in clarifying the business case for CBDCs, from an inclusivity, financial performance and interoperability perspective.

However, it would be wise for commercial banks to track these design features and model potential impacts on their business so that any mitigating actions, such as increasing interest rates on savings accounts or providing CBDC wallet overflow accounts, can be planned well before they are needed.


Future thinking: digital opportunities for banks

Looking at the various CBDC projects there is no need to fear competition from central banks.

The proven division of roles and tasks between central banks, customer banks and financial service providers, in which consumers are supplied and serviced in a decentralised manner, may remain intact.

In this future scenario, commercial banks may not only retain their previous role and function, they can even expand their position as service providers.

With the basic currency infrastructure delivered by central banks, this provides a driver for digital innovation. The introduction of a general CBDC may pave the way for new digital business models and additional revenue and growth opportunities.

Commercial banks can also use the introduction of a digital central bank currency to bind customers even more closely to themselves with special apps for the use and custody of CBDC and to link them with new CBDC-based customer services.


Carlo de Meijer

Economist and researcher






Subscribe and receive your 41 pages ‘easy-to-read’ eBook, What is Treasury?

16-05-2022 | treasuryXL | LinkedIn |


Treasury, Corporate Finance, Cash Management, Risk Management, Working Capital Management and Blockchain. What are the purposes of these treasury functions?

treasuryXL created this eBook based on the most relevant best practices that Treasury experts provided over the last years. We bundled the most important information for you and created easy to read and understand articles about the main subjects within the World of Treasury.

We took a deeper dive into each of the above-mentioned treasury functions and highlight:

  • The purpose of each named Treasury function (What is?)
  • What specialists do
  • Examples of Activities
  • Summary of Frequently Asked Questions and answers
  • Conclusion

How to receive this eBook for Free?

We simply giveaway two presents for you! By signing up for our newsletter you will automatically receive the following in your inbox:

  1. On Fridays, our Coffee Break weekly newsletter will land in your inbox. In this weekly newsletter, we will highlight the whole week full of the latest treasury news within our community.
  2. The 41 pages eBook, What is Treasury?


Subscribe, Join, Download and Relax.

Welcome to our community and have fun reading!



Director, Community & Partners at treasuryXL





Attend the 33rd Finance Symposium | 18-20 May 2022 | Mannheim

20-04-2022 | treasuryXL | LinkedIn |


The treasury and finance community finally meets in person again. treasuryXL is proud media partner of the 33rd Finance Symposium.



For more than 30 years, the Finance Symposium has developed into the most important industry gathering for treasurers and finance managers in the German-speaking world. Every year, around 2,300 finance experts meet to discuss together, make contacts and receive new impetus. The outstanding congress program offers visitors a broad spectrum of professionally challenging topics from finance and treasury management in three days. In over 170 forums, workshops and expert panels, participants will learn about the latest developments in finance and treasury.



The speakers are high-ranking finance managers from major companies and prominent guests from politics and business. For example, in 2022 Martin Schulz, former President of the European Parliament , and Verena Pausder, entrepreneur and expert in digital education, could be won for exciting presentations and discussions. The most important banks, system providers and financial service providers in the industry will present themselves on 1,000 m2 of exhibition space.

For more information and tickets, visit: www.finanzsymposium.com




Director, Community & Partners at treasuryXL





Your free eBook, What is Treasury?

13-04-2022 | treasuryXL | LinkedIn |


Receive your eBook What is Treasury? after subscribing to the free treasuryXL weekly newsletter.

The world of Treasury is a complex topic. Many people will think about pirates and big see ships that sank deep into the bottom of the ocean including their ‘treasure’. A mystery treasure map will lead the finder to a treasure worth a lot of money. In some way Treasury and Treasure have similarities, it is about money and other valuables.

Are you having a hard time how to explain what treasury is to family, friends and colleagues? Or are you interested to learn more about the World of Treasury?


treasuryXL created a 41 pages eBook for the corporate treasurers and the world of finance addict.

This eBook is designed to answer layman questions about the function of Treasury. treasuryXL bundled the most important information for you and created an easy to read and understand articles about the main subjects within the World of Treasury:

This ebook will answer your questions about Treasury topics.

treasuryXL explains the purpose of each Treasury function; what specialists do, examples of activities, FAQs, and a summary.

This ebook is based on the most relevant best practices that Treasury experts provided over the last years. On the website of treasuryXL you can explore additional information on the latest in Corporate Treasury.





Director, Community & Partners at treasuryXL





Crypto in the frontline: victim or survivor

11-04-2022 | Carlo de Meijer | treasuryXL | LinkedIn |

The war of Russia versus its neighbour Ukraine has triggered many countries from the West to impose severe sanctions, mainly aimed at hurting the oligarchs around president Putin. They are trying various ways to evade these sanctions as much as possible. Western countries led by the US now also have put crypto on the sanction list, as there are increased signals that oligarchs moved to cryptocurrencies to hide their assets. This however raises a number of questions such as: in what size are cryptos being used, what is the effectiveness of crypto sanctions and what are the limitations of using crypto to circumvent these. But above all will crypto become a victim or a survivor in the end.

Western allies: sanctions

The U.S. and its allies including the EU, UK and Canada have imposed heavy sanctions on Russia’s financial infrastructure, and against the wealthy elites close to president Putin, known as oligarchs, their banks and financial intermediaries, thereby trying to block the pass-through of their assets.

Western governments have frozen Russia’s reserves in the West and ousted Russia from the SWIFT banking system, while banks are resisting deposits and transfer requests and ramped up compliance checks for fear of contravening sanctions. A number of countries have also seized some oligarchs’ assets by law enforcement as part of the sanctions including yachts, private jets, real estate and/or financial assets. Next to that foreigners are not allowed to sell their domestic securities in Russia, while on the other hand local exporters are being urged to liquidate a vast portion of their foreign currency holdings.

Impact of sanctions on the Russian economy 

These sanctions are mainly aimed to hit Putin and the group of billionaire oligarchs who support him, it is hurting the entire Russian economy. The Institute of International Finance estimates that the Russian economy will shrink by 15% this year, instead of the 3% growth that was expected pre-invasion.

Russia lost access to vital imports for its military gear and more than $600 billion in assets held by its central bank. The country also faces ongoing rounds of targeted sanctions against companies and the wealthy elite, which have already lost more than $38 bn up till now.

The measures have crippled the banking sector and financial system, whereas the Russian stock market has yet to reopen since the sanctions began. Rating agencies are prompted to downgrade the country’s debt and warned Russia would likely default if it used Rubbles to repay dollar-denominated debt .

As a reaction, the Rubble initially collapsed, but returned to its pre-war level thanks to income from Western gas deliveries. There are however still concerns that the inflation rate would further rise. In order to stop this, the central bank of Russia has increased its benchmark rate to 20%.

Crypto is taken a crucial role in the Russian-Ukraine war

As cryptocurrency is now a more mainstream part of the global financial system, it has been inevitable that it became a part of this international conflict as a key tool in this war. Some even called Russia’s invasion of Ukraine “the world’s firts crypto war.”

Cryptocurrencies have thereby taken opposite roles: it has become a tool of Ukrainian resistance, being sent as donations to help the government in Ukraine; it also provided a lifeline for some fleeing Ukrainians whose banks are inaccessible; at the same time, it is being used by Russian oligarchs to evade sanctions, but also by normal Russian citizens as a flight to safety.

Ukraine: donations to finance the war

It is not that strange Ukraine is using crypto during the conflict. Not only is Ukraine one of the most cyber-literate countries in the world, it has also been one of the most open to exploring the use of cryptocurrency in the past few years.

The Ukrainian government itself is urgently asking for donations in crypto to finance the country’s defence against Russia. More than$100 million worth of crypto has been sent to support Ukrainians over the past several weeks. The Ukrainian government has already spent at least $20 million of the crypto it has received. Because the country’s officials can’t make all the purchases they want using crypto, they sometimes convert some of these donations back into fiat currency to buy supplies.

The government has also launched a website to centralize its crypto-based fundraising efforts, but it is also open to fiat currency donations. This new website explains that Ukraine is indeed accepting several cryptocurrencies, including Bitcoin and the meme-inspired Dogecoin, to support its fight against Russia. Ukraine also plans to issue NFTs (non-fungible digital tokens) to support the war against Russia.

Russia: evade sanctions and flight to safety

The use of Bitcoin in Russia has accelerated since the beginning of their offensive against Ukraine. While ordinary citizens see it as a way to maintain their buying power, the elites may be using it to circumvent sanctions thereby hiding their assets in cryptocurrency. Crypto’s thereby offers a flight route that would otherwise not exist.

Evade sanctions by oligarchs

Russia is the third-largest Bitcoin mining nation in the world. So, the fact that cryptocurrencies could be used by oligarchs that are hit by the Western sanctions as a vehicle to evade these has been a concern

In some ways, using cryptocurrencies would make sense for Russia, existing in a closed system being not regulated by central banks. Not only do they facilitate peer-to-peer and borderless transactions, but they’re also non-confiscatable unless another party knows the holders’ private key.

Flight to safety for normal Russians 

The increased use of crypto is however dominated by normal Russians that are looking for a safe haven for their money. The drastic fall of the Russian Rubble showed why ordinary Russians had good reason to buy cryptocurrency, giving a way out of the crisis.

With both the public and private banking sector in Russia increasingly frozen out of international commerce and access to foreign currencies blocked, Russian citizens have been scurrying to convert roubles into cryptocurrency to help preserve wealth.


Elliptic: Real crypto activity in Russia 

Blockchain security firm Elliptic is actively investigating crypto asset wallets believed to be linked to Russian officials and oligarchs subject to sanctions, while collaborating with government agencies and other organisations. Elliptic has thereby tracked down a crypto wallet, which has ‘significant crypto-asset holdings’, amounting to millions of dollars worth of crypto. The findings come amid a heated debate on whether cryptocurrencies can be used to evade additional sanctions imposed on Russian oligarchs and officials since Russia’s invasion of Ukraine.

The firm has passed on to authorities information on this digital wallet. They have identified several hundred thousand crypto addresses linked to Russia-based sanctioned actors. Elliptic claims it has “directly linked” more than 15 million cryptocurrency addresses to criminal activity with a nexus in Russia. This goes beyond those included in sanctions lists to include other addresses that Elliptic has been able to associate with these actors.

The firm has also identified more than 400 virtual asset service providers (VASPs), mostly exchanges, where cryptocurrencies can be purchased with roubles. Most of these services are unregulated, and can be used anonymously. According to Elliptic, a week before the conflict between Russia and Ukraine broke out, Rubble-related activity on some of these services (like Tornado Cash ) was seen surging. Tornado Cash has declined to restrict services or comply with the sanctions and continues to anonymise transactions in Ethereum.


Western allies: halt crypto escape routes 

Politicians and regulators across the West expressed their worries about these crypto escape routes used by Russian oligarchs. In order for the sanctions levied by the Western allies to have the maximum impact they are advocating for more action to close off avenues oligarchs might use to evade.  Authorities worldwide are now closely monitoring any efforts to circumvent or violate Russia-related sanctions via the use of digital currencies.

All big crypto market places are urgently asked to block Russian users and cut off of the trade in cryptocurrencies, to ensure that specific sanctioned individuals and organisations from Russia are not using their platforms.

Worldwide banks and intermediaries should report suspicious transactions, and be watchful of Russian oligarchs and governments institutions to evade sanctions through crypto.

US crypto regulation

The US has sped up the launch of US legislation for cryptocurrencies, ‘to close potential avenues for evasion of sanctions against Russia’. Crypto exchanges, wallet hosts and other crypto service providers will be prohibited from engaging in crypto transactions that involve blocked Russians.

This legislation aims to ensure that president Putin and his oligarchs do not use digital assets to undermine the international community’s economic sanctions against Russia for its invasion of Ukraine. It would give the US government the authority to ban US companies from processing cryptocurrency transactions connected to sanctioned Russian accounts. Treasury will be given the authorization to treat these crypto platforms much like the banks are treated: i.e. got to know your customer and not dealing with people who are in violation of sanctions and to block if they are sanctioned.

This Digital Asset Sanctions Compliance Enhancement Act (DASCE) will identify foreign digital asset actors that are facilitating the evasion of sanctions against Russia and authorizing to apply secondary sanctions to foreign cryptocurrency exchanges doing business with sanctioned Russian individuals, companies or government agencies. It would also provide the Treasury Secretary with the authority to prohibit digital asset trading platforms from transacting with cryptocurrency addresses that are known to be in Russia.


US CleptoCapture taskforce

The US Department of Justice announced the creation of a new task force dubbed CleptoCapture, to enforce sanctions on Russian oligarchs. The actions of the new task force will be focused on freezing and seizing their assets.

The task force will also investigate banks, financial firms and cryptocurrency exchanges that have helped oligarchs hide or launder their money, and prosecute those that fail to prevent sanctioned individuals using their services. Their goal is to bring any appropriate charge against any sanctioned Russian oligarch or entity, and those who would help them to evade economic sanctions.

In addition to pursuing charges such as money laundering, sanctions evasion and wire fraud, the task force will trace assets that are tied to federal crimes impacting the U.S. financial system and seek to seize them through civil and criminal forfeitures.

The CleptoCapture task force would consist of professionals in expert control enforcement, asset forfeiture, tax enforcement, overseas evidence gathering, and anti-money laundering. The task force will work with prosecutors, agents and analysts, among others, and will pursue “appropriate charges” and will try to disrupt Russian assets and their facilitators.

In the meantime, the Kleptocapture task force will be exclusively authorized to leverage advanced investigative techniques such as cryptocurrency tracing, foreign intelligence sources, data analytics, and relevant data from financial regulatory agencies and private sector partners.


EU crypto legislation


The EU clarified that its sanctions against Russia and Belarus would also include cryptocurrency transactions. The EU is looking at putting more sanctions on wealthy Russians and recently also Belarus are banned from trading digital assets in the EU. They thereby also include the families of those Russians along with members of the Russian Parliament.

The EU crypto legislation to regulate and control cryptocurrency transactions incl. the movement of Russian capital, already provides for ways for the EU authorities to intervene in cryptocurrency accounts, known as wallets. They can also selectively intervene before the currency conversion takes place. There are companies, including the exchanges, that can mark wallets that have been identified as being related to the Russian government or its collaborators.


G7 REPO taskforce

The G7 is also looking to coordinate on sanctions enforcement so that Russian efforts to evade can be dealt with effectively. They are committing to impose measures to make sure that the economic repercussions are felt by Russia through restrictive measures, to ‘cracking down on evasion and to closing loopholes’.

Representatives from the US, Australia, Canada, Germany, France, Italy, Japan, the United Kingdom, and the European Commission agreed to launch the REPO (short for Russian Elites, Proxies, and Oligarchs) multilateral task force. Agencies in these countries will work together to collect and share information to take concrete actions, including sanctions, asset freezing, civil and criminal asset seizure, and criminal prosecution. The group is now looking into 50 individuals, with 28 names publicly announced.

US CleptoCapture will closely work alongside the REPO task force, to enforce the economic restrictions imposed on Russia. Both groups will use data analytics, cryptocurrency tracing, intelligence, and data from financial regulators to track sanctions evasion, money laundering and other criminal acts. Countries that serve as havens to oligarch’s property will have to cooperate in REPO’s effort, or else sanctions will be less impactful.

Crypto platforms reaction

From the start of the Ukraine war cryptocurrency exchanges around the globe were pressurized to ban transactions with Russia. Aim was to prevent Russian oligarchs from using crypto. The Ukraine vice prime minister Fedorov even asked not only freeze the (crypto) addresses of Russian and Belarus oligarchs and politicians but to even ban normal Russians.

Somewhat expected, initially most of the largest exchanges were not willing to comply with these sanctions and did not really react on calls to block Russians. Binance, Coinbase and Kraken, and other popular digital asset trading platforms said blocking Russian-based entities would be against crypto’s nature and contrary to the reason of existence of crypto.

But mainstream crypto players had to change their stance shortly after. This came after the US and other watchdogs introduced bills to prohibit financial entities from operating with Russian banks and customers. In the meantime most mainstream crypto players have complied with the regulator’s requests saying they will abide the imposed sanctions, and cracked down on transactions originating out of Russia.

They took necessary steps by freezing crypto moneys of specific persons from the direct circle around Putin. And they are already working as per the instruction of conventional financial institutions to collect data on their consumers and recognize suspicious activities. Coinbase disclosed that it had blocked 25,000 accounts supposedly linked to sanctioned Russians, who were suspects of carrying out illegal activity.

They however declined an outright ban on all Russian accounts as was asked by the Ukraine vice-prime minister. These crypto exchanges argue that “banning the entire nation could run counter to Bitcoin’s spirit of offering payments access free from government oversight. It would also be unethical if all Russians would not get entrance to their cryptocurrencies, or could not trade anymore”.

However, there are still more than 400 crypto services in the world that are refusing to shut down access by Russians to their exchange platforms and let anonymous users trade digital assets using Russia’s native currency, the Rubble.


Limited power of crypto to circumvent sanctions

Crypto can and will be used for sanctions evasion. What’s in question is on what kind of scale. Crypto however is not a perfect solution to bypass authorities. It is not proving out realistic that oligarchs can completely circumvent sanctions by moving all their wealth into crypto. Statistics also suggest there is little sign of Russian-based oligarchs moving large sums out of Rubbles and into crypto assets. It also suggest anyone wishing to trade large volumes of Bitcoin against the Rubble will have difficulties.

Crypto “is not the silver bullet.” For that crypto has a number of important limitations.

Crypto is pseudonymous
It turns out to be harder to hide via using crypto than Russian oligarchs might think. Blockchain assets don’t have the best privacy, which, makes large-scale transfers and buys difficult to conduct without being identified. Almost every public blockchain – including Bitcoin’s – is pseudonymous, yet totally comprehensive. All of the largest crypto exchanges are required to collect personally identifiable information from their customers to comply with KYC and AML rules. In order to register on a regulated crypto exchange need to upload a passport and corroborating identification.

No complete anonymity
There is no such thing as complete anonymity on a blockchain. Ultimately, crypto is very easy to track, whether it’s decentralized or centralized. To monitor accounts and transactions, all you need is a wallet address. It is possible to protect a crypto wallet from scrutiny by taking it offline. That typically means using a hardware wallet — also referred to as a cold wallet — that is not constantly connected to a blockchain network. Oligarchs can hide their crypto, but moving it is another matter, especially, especially if they’re moving huge amounts.  

Crypto is traceable

No one would be able to convert crypto assets to official currency without properly identifying themselves. If one want to buy cryptocurrencies they must also show/prove the source of those assets.

Once oligarchs  try to move funds, the crypto account or wallet, which is typically identified as a series of numbers and letters, is visible to a network. With that wallet one can see how much is in the crypto accounts. Pretty much all transactions can be tracked. Funds can be traced through the blockchain ledger to screen them for links to all known and inferred cryptocurrency addresses controlled by sanctioned actors.

While no ledger address explicitly names who controls it, its entire historic activity is available for all to see. Every transaction that an identified account has with another account is noted and can be traced. The nature of these activities and the volume of transactions taking place with the address is sometimes enough to identify its owner.

Those that have not complied with these rules in the past have faced major legal repercussions. They are also disallowed from facilitating transactions with blacklisted individuals, providing a major roadblock to those groups from cashing out on their crypto.

Low liquidity
The capacity to put large amounts of Rubbles through crypto exchanges operating in Russia is also heavily constrained by the relatively low liquidity in Russian crypto trade. A measure of the liquidity of the Russian Bitcoin exchanges is the value of orders submitted by buyers and sellers at any given time. This is about US$200,000, compared with $US22 million for US-based crypto exchanges – a volume 110 times larger.


Short cuts for oligarchs

Oligarchs however have other methods to secure their belongings and shield their money and assets in creative ways.

There are signals that crypto companies in the United Arab Emirates, Dubai and Qatar were inundated by requests to liquidate billions of dollars of digital currency from Russians who are seeking to protect their wealth. They are thereby cashing out their crypto assets to invest in real estate in these countries.

But it is more likely that most of their capital was already protected earlier than the sanctions have been launched and that their wealth is mostly invested through shell companies in assets in tax havens like Bermuda, British Virgin Island, Isle of Man or Monaco. They often have real estate ownership in relatives’ names or have assets registered in these tax havens.

Most of these oligarchs may also have their fiscal residence in another country, or have groups of companies that operate in different jurisdictions, making it possible to at least partially avoid the new sanctions.


Crypto: victim of war or .….  may it survive?

For now, we don’t know how crypto will shape the international conflict, or whether it will ultimately help or hurt. What we do know is that Bitcoin and other cryptocurrencies are now a real factor in global economies and in conflicts.

But what does that all mean for crypto itself? Crypto nowadays faces another defining moment in its still short history. Whether it’s good or bad in wartime, crypto is doing what its proponents say it does — giving people a way to work outside of traditional financial institutions — and there’s no sign that will change anytime soon

The Ukraine war however will be an interesting test case for the crypto sector at large. There is the risk that the vision for the transformative power of crypto is at risk of being overtaken by greed.

May it become a victim of the war and will that mean the end of crypto …. or may it survive in the longer term. The ultimate goal of crypto is not to fight a war but to be used in a free world and do the things that accomplish meaningful effects in the real world. In terms of:

–       bringing the many unbanked people around the world into financial systems

–       allowing capital to flow unencumbered across borders

–       and providing the infrastructure for entrepreneurs to build all sorts of new products.


Carlo de Meijer

Economist and researcher






Career Calibration and the Treasurer Test

31-03-2022 | Pieter de Kiewit | Treasurer Test | LinkedIn |

On a regular basis, we write about your career planning in treasury, our opinions, and observations. Two articles on the website of Treasurer Search that are strongly related to this and very well viewed are:

Also, you might have noticed that we are big fans of the Treasurer Test, which helps treasurers in visualizing their skills and personality.

Read more

Meet our Expert | 8 questions for Peter Löbl-Brand, Corporate Treasurer and Lecturer

21-03-2022 | Peter Löbl-Brand | treasuryXL | LinkedIn |


We are happy to interview our newest treasuryXL expert, Peter Löbl-Brand.

Peter has been a corporate treasurer for over 10 years and is also a lecturer for multinational finance and risk management at the University of Applied Science in Wiener Neustadt, Austria.

Peter gathered insights while advising multi-national listed companies as well as local small and medium-sized companies.

He currently lives south of Vienna and is focusing on re-/structuring corporate treasury departments of SMEs.

Visit Peter’s LinkedIn profile to see an overview of his career and activities. But first…

We asked him 8 questions, let’s go!



1. How did your treasury journey start?

My treasury journey started about 10 years ago as a credit risk manager at RHI AG, now RHI Magnesita. After about 3 years of working in this position, I got the chance to take over the Treasury team as team leader.

2. What do you like about working in Treasury?

It’s a people’s business. Ensuring liquidity and therefore laying the foundation for the operative business of the corporate while having always a close relationship with your capital partner end strengthening their trust in the corporate feels like being one of the most important and highly valued links in the business.

3. What is your Treasury Expertise and what expertise gives you a boost of energy?

I started my career in the group treasury of a listed company. Stage by stage I developed myself into a full-scale treasury and commercial officer working for a bigger SME company right now. My focus is on small to medium sizes companies with a high need for commercial structuring and the need to set up treasury management from scratch. To build, entertain and lead by example is energizing myself to perform.

4. What has been the best experience in your treasury career until today?

Enabling business with partly sanctioned customers and countries.

5. What has been your biggest challenge in treasury?

Maintaining the tension and excitement after more than 10 years in corporate treasury.

6. What’s the most important lesson that you’ve learned as a treasurer?

Do not trust a soft commitment.

7. How have you seen the role of Corporate Treasury evolve over the years?

From my understanding, the corporate treasury is a business enabler. Especially when driving business internationally the corporate treasury is able to pilot business relationships to success. Based on that understanding Corporate Treasury is always seeking to find better instruments and the appropriate solution to close a deal.

8. What developments do you expect in corporate treasury in the near and further future?

I expect more and more solutions and instruments acting on the blockchain. Right now the industry is too much focusing on the blockchain as an enabler for cryptocurrency. Using the blockchain in international business will also solve the impossible trilemma as it makes business cheaper, adding quality and reducing costs for all parties.


Get in touch with Peter
Click here for his Expert Profile


Thanks for reading!



Kendra Keydeniers

Director Community & Partners, treasuryXL





Meet our Expert | 8 questions for Jermal McDaniel

14-03-2022 | Jermal McDaniel | treasuryXL | LinkedIn |


We are happy to interview treasuryXL expert, Jermal McDaniel.

Jermal is an accomplished Finance practitioner with over 16 years of Treasury operations and Finance experience.

Jermal is an innovative visionary who utilizes a “Think Tank” methodology to generate ideas and action plans designed to streamline and automate manual processes to facilitate department efficiency.

How did his career in Treasury start and what is his best experience working in Treasury?

We asked him 8 questions, let’s go!



1. How did your treasury journey start?

My Treasury journey started when my agency recruiting career ended in 2003. I did not set out to be a Treasurer, I kind of found myself in the Treasury field and I am blessed to still be a part of the Treasury Community.

2. What do you like about working in Treasury?

I love the sense of urgency, the attention to detail, and the camaraderie/synergy needed to be a successful Treasury department. I often tell my staff that Treasurers are not born, they are made, and if you are detail-oriented, can work well under pressure, and are timely and accurate, I can give you the rest of the tools to be successful.

3. What is your Treasury Expertise and what expertise gives you a boost of energy?

My Treasury experience is Mortgage-related. When studying for the CTP it gave me a lot of insight into FX transactions, Short Term liquidity investments, and optimal Debt vs Equity financing philosophies for Firms, but my expertise is in managing all aspects of Treasury including Banking relationships and building well run cross-functional Treasury Teams.

4. What has been the best experience in your treasury career until today?

My best experience has been seeing a few of my former employees take the knowledge and guidance that I have given them and parlay that into Sr. Manager and Director of Treasury roles.

5. What has been your biggest challenge in treasury?

Data mining, and consistently getting timely information reconciled and into a useful form for Senior leaders to use for decision making.

6. What’s the most important lesson that you’ve learned as a treasurer?

You cannot perform all of the Treasury functions on your own and if you do not have a cross-trained Treasury team, there will be a high probability that important transactions will fall through the cracks tarnishing the reputation of your team and the department.

7. How have you seen the role of Corporate Treasury evolve over the years?

I am excited to see that Firms are really beginning to value what a good Treasury department means to the Firm. As the stewards of the Cash, making sure that there are enough funds to satisfy all of the financial obligations is Paramount to the success and reputation of the Firm.

8. What developments do you expect in corporate treasury in the near and further future?

There is a big push to bring on more Fintech resources to help with recording and reconciling all of the day-to-day cash movements. Treasury Management Systems are helping to streamline cash forecasting and reconciling by becoming a “Single Source of Truth” where information can be accessed by all of the Stakeholders making everyone involved more self-sufficient.


Get in touch with Jermal
Click here for his Expert Profile

Thanks for reading!



Kendra Keydeniers

Director Community & Partners, treasuryXL

Example Question #1 | Treasurer Test

09-03-2022 | treasuryXL | Treasurer Test | LinkedIn |


How is your Treasury knowledge? Today we investigate your Treasury Expertise and ask you an example question that you might face when taking the Treasurer Test

Read more

Meet our Expert | 8 questions for Patrick Kunz, the Passionate Treasurer

01-03-2022 | Patrick Kunz | treasuryXL | LinkedIn |


We are happy to interview treasuryXL expert, Patrick Kunz.

With Patrick’s impressive career within the World of Treasury, you can really say that he lives and breathes Treasury.

Patrick is performance driven. He is an open minded, outgoing, rational person who is comfortable communicating and convincing on all levels of management.

Patrick is owner of Pecunia Treasury & Finance with several independent treasury and finance consultants and founder of treasuryabonnement.nl. Furthermore he owns an online FX trading and payment platform with a connection to a big FX broker.

Patrick has worked with both international corporates from all fields of business as well as national non-profit organisations.

We recommend to visit Patrick’s LinkedIn profile to see his stunning career and activities. But first….

We asked him 8 questions, let’s go!



1. How did your treasury journey start?

During my study at Maastricht University I knew I wanted to work in the “world of finance” and more specifically trading or investment banking. In my 3rd year of university I got the opportunity to work as an intern for a Swiss Investment bank in Zurich which was a great first experience into wealth management and client exposure with high net worth clients. It also showed me that the client comes first, even though the client was not always right. This made me wonder if it was more fun on “the other side” at the buy side. It slightly frustrated me that a bank would not always provide the best solution.


After graduation I left on a trip around the world backpacking for 1,5 years. Enjoying ultimate freedom and fun before starting a career. When I came back to the Netherlands I applied for treasury roles at multinationals and landed my first job as cash & treasury manager at the German multinational Metro Group (the wholesaler, not the Dutch free newspaper). This was the start of my treasury career which until now I would never leave.


2. What do you like about working in Treasury?

It’s the core of a company. In the end its all about the money. Independent on what products you are selling and how you are selling them. Cash in vs Cash out. Without cash a company has a problem. Cash is king and profit is an opinion so in my opinion managing cash is very important and therefore fun. The more complex the more fun. Managing a multinational company with hundreds of bank accounts in different currencies around the global; finding the optimal treasury setup and solutions is great fun. Lastly, treasury teams are smaller compared to accounting or controlling, which make the lines shorter and the team tighter.


3. What is your Treasury Expertise and what expertise gives you a boost of energy?

I started in cash management and FX trading which are great basic skills for every treasurer. My first company also had very short treasury lines and I quickly was involved in global treasury solutions, financing solutions and group companies corporate finance. When I moved on to my second role as group treasurer of a regional housing association, I also got exposure to interest rate derivatives and guarantee management. Afterwards when I started my own consultancy and interim management company 8 years ago I got to do the full spectrum of treasury. So without arrogance I can say in treasury I have done it all. The last years I am doing a lot of TMS/Payment hub implementations, which I enjoy doing. After finishing an implementation it is nice to look back and compare the old way of treasury processes and the new and see how it improved after a couple of months. Very rewarding.


4. What has been your best experience in your treasury career until today?

Building a treasury from scratch is most rewarding and fun to do. 2 years ago I got the opportunity to build the treasury role at the Dutch born AEX company Takeaway.com. There were treasury processes in place but scattered in different departments. Also some of them were sub-optimal. My role was to bring them together and optimize them. Besides increasing the reporting and importance of treasury to management this also brought significant cash savings on bank and FX costs. A couple of months into the rule, the merger/acquisition of Just Eat was approved and the integration with the existing treasury team in London could start, making the team suddenly 400% bigger. After 5 months my work was far from finished but it was time to hand it over to the existing/new team. Looking back what was done in this short time this was one of my greatest experiences in treasury. And a great company to work for.


5. What has been your biggest challenge in treasury?

Nowadays: Opening a company bank account in a short timeframe without difficult KYC questions, especially for companies with difficult or complex structures. I was with a client last year, a scale-up, that moved fast in several countries in Europe. Treasury processes needed to be implemented from scratch in each country while operations was much further ahead but legal and treasury still needed to start. Working with this fixed go live we had to make sure we could receive payments from day 1 onward. In one country we were actually live on day -1 with no room for error. Stressful but successful.

As a consultant I sometimes face tight deadlines or difficult projects that need to be delivered but are dependent on other stakeholders. That is not always easy but this gives me energy to make it happen.


6. What’s the most important lesson that you’ve learned as a treasurer?

You can go fast on your own but you go far together. Sounds cliché but it is especially true in treasury as the treasury department is dependent on data from other departments to make it function. You cannot run risk analysis if you have no exposure data. Same for FX. Doing cash flow forecasting? You need data from procurement, AR and FP&A.

Also visibility and transparency is key. Even the other financial departments accounting and controlling sometimes see treasury as this special people that they have no idea what they are exactly doing. Make sure they understand (and vice versa) what each department does and how you can work together and what data can be shared. Also to avoid duplicating work. So leave the ivory tower and go out there and collaborate.


7. How have you seen the role of Corporate Treasury evolve over the years?

The speed and amount of information has increased and is increasing. Also the complexity of treasury departments. Luckily also the solutions available to manage them has improved. Next to swift solutions we now see advanced TMS solutions or payment hubs that can be implemented within a couple of months giving you full visibility. A treasurer nowadays needs some tech skills to be able to understand the information to implement the TMS or hub. Because the tool will be only be as good as it is being used; garbage in is garbage out. During the many implementations that I have done I have learned a lot about technical connections (sFTP, h2h, API), information exchange formats, XML file types, swift messages etc. This knowledge now helps me a lot in implementations and supporting the IT department determining the information needs and sources.


8. What developments do you expect in corporate treasury in the near and further future?

Instant payments are a big thing in treasury which is cool but will not necessarily bring much added value to the treasury. Instant information processing is more important especially in e-commerce. Clients expects instant service. If they pay online they expect to get the service or goods asap. Treasury can help with this by connecting their PSP’s or bank information to their systems. Not necessarily linking the payment to an invoice which is an accounting reconciliation process. More importantly linking the positive acknowledgment (the customers has paid) to the sales. Customers start demanding this more and more and treasury has to adapt to this instant world. This means more automation.

Clients also demand more payment options, some of them are not available at banks. This means that treasurers will have to move away from the traditional model of banking partners for cash management but to a more hybrid model of cash at bank, cash in transit at PSP’s, virtual credit cards, wallets etc. Maybe even crypto or CBDC deposits/balances. This will all add to the complexity of the cash and risk management.


Isn’t treasury the best department to be in? 😊 I already get excited saying this.


Get in touch with Patrick
Click here for his Expert Profile


Join Patrick and experts from Kyriba and Deloitte at the Panel Discussion: How Can Treasurers Overcome Today’s Security Challenges?

When? March 9
Start: 4.00 pm CET

Register here

Thanks for reading!



Kendra Keydeniers

Director Community & Partners, treasuryXL