Cryptocurrencies: The ‘Silver Bullet’ in the Russia-Ukraine War?

While the Ukrainian government and other organizations donate cryptocurrencies to help the country distribute emergency resources, Russia uses cryptocurrencies in response to Western sanctions.

Both the Russian and Ukrainian economies have been quick to adopt digital currencies to gain competitive advantages. This is also the first time the world has witnessed the power of blockchain technology (blockchain) on a large scale, as well as a crowdfunding effort in support of defense.

Cryptocurrencies: The ‘Silver Bullet’ in the Russia-Ukraine War?

But is cryptocurrency a “silver bullet” that easily and quickly solves problems that arise in the context of fighting?

Can Russia Use Cryptocurrency to Mitigate Sanctions?

In the face of a series of sanctions from the West, the Russian economy is facing unprecedented challenges. Russia has been removed from the global banking system SWIFT, third-party payment service providers such as PayPal, Visa and ApplePay have also severed ties with the country, forcing the Russian people to seek solutions. alternative finance.

In the face of a tense situation, the legalization of cryptocurrencies has received great attention from the public. “Since there is no central controller that imposes ethics on users, cryptocurrencies can be used to raise money,” said Tom Robinson, scientist and co-founder of crypto analytics firm Elliptic. crowdfunding for Ukraine’s military or helping Russia respond to sanctions. No one can really prevent cryptocurrencies from being used both ways.”

However, Changpeng Zhao, the founder of the Binance exchange, believes that no one can use blockchain to alleviate sanctions because all transactions are recorded in a public distributed ledger.

Ethical concerns

Since Bitcoin and other cryptocurrencies can be sent and received anonymously, it is used to raise funds to overcome things that traditional fundraising platforms do not allow.

This raises an important question: how does using cryptocurrencies to raise funds for war relate to ethical issues?

For now, the answer depends on who is holding the money and how it plans to disburse it. The Ukrainian government and NGOs such as Come Back Alive have made it clear that the funds will directly support the Ukrainian military in favor of a variety of purposes, including military equipment, medical supplies, and military equipment. economy and drones…

So far, the Ukrainian government has received more than 50 million USD in crypto contributions in BTC, ETH, USDT, DOT, TRX, DOGE and several other ERC-20 tokens.

Does cryptocurrencies really help ordinary people?

Currently, some Ukrainians have left the country and put their hopes in cryptocurrencies, planning to convert them into fiat as soon as they arrive in a safer place.

Ukraine and Russia have restricted fiat transfers and withdrawals, so cryptocurrencies are a “financial outlet” for ordinary people. While these are not solutions that can completely revive the crumbling economies of both countries, they will certainly help the thousands of people who have lost their homes and their savings.

However, using cryptocurrencies in times of crisis is not an easy thing because in addition to a working device and an Internet connection, users also need a basic knowledge of operating wallets and blockchains. in general, the majority of the population still has not had much access to this.

With those constraints and the rise of capital controls, cryptocurrency is only useful to citizens of Ukraine and Russia who already own it.

Ukraine has been actively promoting digital currency for the past few years and has one of the highest crypto adoption rates in the world. It is estimated that nearly 5.5 million Ukrainians already own cryptocurrency, which is more than 12% of the national population.

Although, the Central Bank of Russia believes that cryptocurrencies bring many risks, the Russian government has the opposite view. It is estimated that almost 12% of Russia’s population, or 17.3 million people, owns cryptocurrency.

While centralized exchanges like Binance and Coinbase have managed to keep crypto channels open to Russians, especially ordinary citizens looking for a source of financing, at the same time efforts to Scanning for malicious agents is also fierce. Coinbase, has blocked more than 25,000 wallets of Russian users involved in illegal activity and is actively monitoring its system to prevent any attempts to evade sanctions.

With all of the above, it can be seen that cryptocurrencies may be playing an important role in the fight scene, but it is not a “silver bullet” that can be easily and quickly resolved. losses and heal all wounds. It just seems like a temporary solution to partially overcome the difficulty for many people in both countries.

Huong Dung(According to Venture Beat)