Data from Bitcoin (BTC) marketplace Paxful shows a huge surge of interest in cryptocurrency peer-to-peer trading in Russia, with 350% growth on a year-over-year (YoY) basis.

According to the study, from the period of May 2019 to May 2020, Paxful is now seeing an average monthly trading volume of $4M in Russia. The company says that this number “exceeds expectations,” together with the YoY usage increase figures.

The last three-months saw a 42% increase, with May recording the best monthly performance amid the COVID-19 pandemic. The virus is one of the major drivers of growth according to Paxful.

Lack of confidence in Russian banks

Speaking with Cointelegraph, Ray Youssef, CEO of Paxful, provided his thoughts on the reasons behind the spike. He said there was a “strong belief in the future of cryptocurrency” combined with a “lack of trust that some may experience within their traditional financial systems.”

“COVID-19 also brought about a wave of financial insecurity globally, which contributed to more peer-to-peer interactions within the crypto sector.”

Youssef recalled the experience of Russians during the economic downturn in 1998, when people tried to withdraw cash unsuccessfully, as “the banks seemed to have dried up.” A turn to BTC could “be to offset any economic damages” that could occur due to the pandemic, he said.

Watch out for the monoliths

Anton Kozlov, Paxful’s manager for the Russian market, added that Russia has “always had a monolithic banking system,” which is encouraging citizens to look for alternative ways to participate in the financial markets such as crypto P2P trading.

Recently, a branch of the Russian federal government published a draft of new litigation called On Digital Financial Assets, which is focused on enforcing strict cryptocurrency laws in the country. The legislation has not been approved yet and has been in discussion since 2018.