Crypto at War: Its Role in Russian-Ukrainian War

As Crypto is becoming part of new fields every day, this time it is reshaping the future of global conflicts for both better and worse. Usually, at times of war, people resort to gold as the ultimate safe haven, but today, even governments are turning to crypto.

Also ReadHow Do Wars Affect Gold Prices?

As the largest European military conflict since World War II deepens, casting a haze of uncertainty and amplifying anxieties, both parties are utilizing the borderless and permissionless method of payment to gain an edge in the geopolitical showdown.

On one hand, Ukraine, the fourth largest cryptocurrency adopter in the world, according to Chainalysis, is now accepting bitcoin, ethereum and other crypto donations. On the other hand, Russia may turn to crypto to evade possible economic sanctions as well as the SWIFT block. 

The Ukraine central bank is seeking donations via crowdfunding to help support the embattled country. The official Twitter account of the Ukrainian government has reached out to the Twitter crypto community asking for donations in Bitcoin (BTC), Ethereum (ETH) and Tether (USDT) to help those suffering from the ongoing war. 

So far, Ukraine has received 10 BTC and 85 ETH. Also, FTX crypto exchange gave $25 to every Ukrainian using the platform. You can find inspiring stories of how crypto is helping people evade the country all over the internet.

It's no surprise that the Russian invasion spooked the nervous investors who started withdrawing from the market as everyone wants to have a wad of cash under the mattress in case of any emergencies. However, when the expectations didn't match reality, the Ukrainian government capped on cash withdrawals, the disappointed citizens were forced to swap crypto, turning the markets’ bearish tint to bullish, recovering almost 10%. 

And just like any tool in this life, crypto is a double-edged sword. As it is being used to help the victims in one scenario, it is being considered as a practical solution to all the issues by the invaders.

Russia is expected to turn to crypto to circumvent global banking system shutdown. It’s worth mentioning that Russia has reversed its decision on crypto showering bitcoin with love by announcing it will regulate BTC as a currency. 

This has reinvigorated the debate about crypto becoming instrumental in funding conflict. In reaction to this, Christine Lagarde, the president of the European Central Bank has called for crypto regulation saying, "It’s so critically important that MiCA is pushed through as quickly as possible so we have a regulatory framework within which crypto assets can actually be caught,".

Also, after Ukraine called for a block on Russian users at key digital currency platforms, crypto exchange Binance told Reuters on Monday that it is blocking the accounts of any Russian clients targeted by sanctions, but it would not freeze the accounts of others as the exchange believes that "Crypto was meant to provide greater financial freedom for people across the globe."

As people in Ukraine are beginning to understand that we are in an economical apocalypse and cryptocurrencies are a neutral, decentralized, digital monetary network that lets any two people anywhere in the world exchange money. It’s not hard to stop this, it only takes courage to embrace this new technology.