Crypto has had its fair share of love and hate from financial institutions around the world and has time and again been welcomed as well as set aside when it comes to deciding upon modes to carry out transactions. When the Russia Ukraine crisis began, no one fathomed that cryptocurrency would gain such importance in the war setting. We tell you how it is changing the way the world is functioning in times of crisis.
How crypto has helped Ukraine
On March 9, Alex Bornyakov, Ukraine’s deputy minister of digital transformation had said that as of the day, $100 million worth of crypto had been sent to Ukrainians to help them through the crisis. This humungous figure is proof enough that crypto has risen to the occasion in times of turmoil and is now a preferred mode of transactions.
The Minister’s statement was also recorded on the same wherein he said to Yahoo! “We partnered with a private exchange which helped us dealing with security, exchange matters. And because we don’t want our money to be stolen... the infrastructure has to be built to operate.”
Why has crypto become a preferred mode of transaction during the war?
Cryptocurrency, an encrypted form of digital currency has been in the news for more reasons than one. While Ukraine has been under attack and people the world over have been donating to the cause, crypto has made it much easier for these transactions to happen. This is because certain Ukrainian financial institutions in light of the situation are limiting the kind of access that people have to foreign currency that is pouring in. In times like these, crypto has offered a perfect solution: a banking system where no Government is involved and able to control transactions.
Alex Gladstein, chief strategy officer at the Human Rights Foundation, highlighting the benefits of crypto, told Recode “The fact that it can’t be frozen, the fact that it can’t be censored, and the fact that it can be used without ID is very, very important. And they are why bitcoin is such an important humanitarian tool.”
Explaining the ease that crypto provides users, he said “In Ukraine right now, you can download a bitcoin wallet open source — totally unconnected from your ID — and you can generate an address via a QR code or an alphanumeric string. You can paste that to me, I can send you $1,000, and it goes through in a few minutes.”
Is crypto a ray of light for both Russia and Ukraine?
Why Ukraine’s benefits have been underlined, it does good to note that crypto is not only being favoured by the one side. Russia too has realised the importance and ease of the cryptocurrency and is now exploring its options.
In fact, just in the news a few days back was the argument of whether Russia would be able to avoid sanctions using crypto. While the points discussed bordered the fact that this wouldn’t be as easy as it seems, the US and its allies continue to be wary of it. Ben Weiss, CEO of crypto ATM operator CoinFlip, was quoted to have said at a webinar that while people are under the impression that anonymity is crypto’s biggest asset, they may be wrong. “It's not anonymous. It's pseudo-anonymous. You can't buy any large amount of bitcoin without a KYC or ID or driver's license. Bitcoin is actually more transparent in many ways than typical things in the financial system.”
Also, the fact that crypto is indeed subject to market risk, is another reason why it cannot be relied upon completely. Russia however, seems to have kept this in mind too and had been working towards building a digital ruble and other technologies to hide the origins of transactions. The Biden administration is now working towards blocking Russian addresses on these crypto platforms which would impact Russia which is the third-largest Bitcoin miner.
All said and done, Bitcoin has proved its mettle and Ukrainians are trusting this form of digital currency.
Ways in which Ukrainians can benefit from cryptocurrency
Here we discuss how the people of Ukraine can rely on Bitcoin, what they might need and how trustworthy it is.
What do these transactions require?
While the three things required may seem simple at first sight, keep in mind that we are speaking of these in a war situation. A working device. An internet connection. Knowledge of crypto. There are thousands of refugees for whom the next meal is uncertain and to have luxuries such as an internet connection, may not be possible. As for the third requirement, knowledge of crypto, Ukraine had passed a law in February that legalised crypto and thus there is only a minor section of the population that is well versed with these dealings of Bitcoin.
Can the crypto be converted?
This is the mode that most Ukrainians are adopting, wherein the crypto that they take with them while escaping can be converted to fiat currency when they arrive at their destination. For others, crypto is a safe space where they can store their wealth and probably retrieve it at a later time when things seem better.
How can you help?
If you are planning on sending currency in the form of Bitcoin to help out people in Ukraine, it would be wise to first check if they are able to access it and if it will indeed help them. As of now, the Ukrainian Ministry of Defense nor the National Bank of Ukraine are accepting crypto donations directly.
Whether crypto does prove useful or futile during the war, it is fulfilling what its supporters have always claimed it does, which is to enable people to carry out transactions without banking on traditional ways.