bitcoin ukraine war: How cryptocurrency is proving to be a double-edged sword in Ukraine war

Synopsis

Cryptocurrency, however, is now acting as a double-edged sword. Although it is a great alternative when it comes to receiving monetary aid directly and it is also a tool to circumvent the monetary sanctions imposed on the Russian oligarchs and the Russian government.

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During times of conflict, economy of the countries that are involved tends to take a hit. Besides the cost of human life, there are severe costs to the economy. These come in the form of destruction of property due to bombings, increase in debt levels to finance the conflict, extreme uncertainty regarding the future of the country, and a huge opportunity cost (instead of building weapons, that money could have been invested to improve the economy).

Ever since the conflict began, there has been a bank run that happened on both sides of the border. A bank run is an event where a large group of depositors wants to withdraw their money from the bank. The Russian central bank even raised its interest rates up to a staggering 20% to stabilise the freefall of the value of the rouble.

In these uncertain times, money tends to flow towards safe havens like gold. However, Bitcoin is looking better. As it is difficult to carry gold around and the value of the fiat currency is free falling, it is far easier to remember the private keys to your crypto. Testimonials are coming from Ukrainian refugees who have some financial stability solely because they brought along cryptocurrency with them. Ukraine Vice President also tweeted about accepting international support via cryptocurrencies and there the crypto community has donated more than $70 million.
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Cryptocurrency, however, is now acting as a double-edged sword. Although it is a great alternative when it comes to receiving monetary aid directly and it is also a tool to circumvent the monetary sanctions imposed on the Russian oligarchs and the Russian government. Either way, cryptocurrency is politically neutral and is currently in the spotlight. People have started stacking on Bitcoin as the number of addresses with more than 1,000 Bitcoins have spiked upwards. Bitcoin to rouble transaction volumes have also made record highs. It means people are selling their roubles and buying more and more Bitcoins.
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Bought onCurrent Value Buy (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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Updated: 03/06/2022 — 07:00