Generally speaking, there is no such thing as good or bad in times of crisis as instead there is often just the best course of action under the current circumstances. So, is crypto beneficial in the light of Russias invasion of Ukraine or are these digital assets more trouble than theyre worth? The answer may not be so straightforward.
The Ukrainian side
Crypto has increasingly become a more mainstream component of the global financial system, which also means that it is now a significant part of international warfare. This was made evident when Russia invaded Ukraine which led to millions of dollars in crypto being donated to help Ukraine fight against their neighbors. In fact, many Ukranians are currently relying on crypto for long-term storage and plan to make conversions back to fiat as soon as the conflict ends.
Some Ukrainians are thus turning to cryptocurrencies as a viable substitute for local financial institutions, which are reportedly restricting access to bank accounts and international funds. In a situation when governments are in disarray, it is therefore difficult to rely on traditional banks, not to mention the long-lasting effect of the increasing apprehension about surveillance. As a result, a largely anonymous system with no government involvement could indeed be very desirable.
But what about Russia?
The romantic version of crypto in crisis, which portrays it as a valid alternative for individuals in desperate situations, inadvertently obscures the industrys darker side. Its an important point to consider, particularly in relation to Russia.
Well before Russia invaded Ukraine, the U.S administration was concerned that cryptocurrencies might dilute the impact of economic sanctions. In the past, Iran had employed Bitcoin mining to circumvent trade embargoes, for instance.
Restricting Russian access to crypto might have serious consequences for the country's economic longevity as cryptocurrencies have rapidly grown in popularity there since Russia is also the worlds third biggest BTC miner. Additionally, just as pro-Ukrainian parties have been able to raise funds using cryptocurrencies, so have pro-Russian separatist movements in Ukraine, particularly in 2014 when Russia attacked and occupied Crimea.
Whats the solution?
Ultimately, its difficult to ascertain what the best course of action is right now. The recent situation in Canada involving The Freedom Convoy is yet another example of the growing use-case for crypto. Still, we will have to wait and see how this industry continues to grow and in which direction.
