- More than $42 million of value has been raised by the Ukrainian government through crypto asset donations since the start of the Russian invasion.
- Ukraine crises has set the foundation for future usage of Cryptocurrency and internet money in the war and conflict zone.
- Ukrainian Vice Prime Minister Mykhailo Fedorov has also appealed to crypto exchanges for blocking the account and wallet addresses linked to Russian users.
Since second World, Europe is in the biggest crises. Nuclear drills have been carried out and nuclear forces have been put to alert. Crises if escalate has the potential to generate series of spiral event which may result into usage of Nukes. According to RIA news agency Russian Foreign Minister Sergei Lavrov has said on Wednesday that third World War will involve usage of Nukes.
Ukraine crises has set the foundation for future usage of Cryptocurrency and internet money in the war and conflict zone. Both in Ukraine and well as Russia it is proving to be borderless, permissionless, demonstrating its ability to reach individuals as well as financing the mechanism of war. It is both good and dirty depending on its usage.
Ukraine legalised cryptocurrency few days before the war by passing the crypto bill. As the war broke, the official Twitter account of the Ukrainian government stated on February 26, 2022 that the Ukrainian government is accepting donation in cryptocurrency. Ukraine’s Vice Prime Minister and Minister of Digital Transformation, Mykhailo Fedorov released wallet addresses on Twitter, urging Global community to stand with Ukrainian people. Ukraine’s central bank has likewise made a request for cryptocurrency donations. Donations are being accepted in Bitcoin, Ethereum and USDT.
Pussy Riot, a Russian band, has also started a crypto-related organisation and is asking for donations in cryptocurrency for supporting Ukrainian people. Bankman-Fried, the CEO of crypto exchange FTX US has stated that each Ukrainian on its platform has been given $25.
According to data provided by Elliptic which tracks the blockchain, more than $42 million of value has been raised by the Ukrainian government through crypto asset donations since the start of the Russian invasion. This includes a $5.8 million donation by Polkadot founder Gavin Wood, and NFT collection from CryptoPunk worth over $200,000. Number of donations related to Crypto asset are over 59000.
Further Ukrainian Vice Prime Minister Mykhailo Fedorov has also appealed to crypto exchanges for blocking the account and wallet addresses linked to Russian users. He emphasised to freeze the addresses linked to Russian and Belarusian politicians and also recommended for sabotaging ordinary Russian user’s account.
European Council has extended its sanction list on Russia in wake of invasion in Ukraine. A total of 680 people and 53 businesses are subject to the restrictions by EU. Asset freezes, prohibitions on money availability to designated individuals and businesses, prohibitions on overflight of EU airspace, prohibitions on transactions with the Russian Central Bank, and other restrictions are included in the scope of the sanctions. US, UK, Canada and Germany have also tightened the restrictions. SWIFT has been banned and many large corporations are leaving Russia due challenges in trading with Russia caused by Sanctions.
Large Russian Banks have been targeted by Washington, EU and UK through sanctions. This include Sberbank, VTB Bank, Otkritie FC Bank, Novikombank and Sovcombank. Restrictions have been placed for raising funds from the Western Capital Market.
Russia has been anticipating the sanctions and earlier in February, before the outbreak of war, Russian newspaper Kommersant, reported that Russia is likely to recognise cryptocurrency as a form of legal currency. The Russian government and the Bank of Russia have agreed on a future financial regime that will allow cryptocurrencies to circulate in Russia.
Russia is also working on its own set of CBDC and may collaborating with some countries for transacting in local currency which does not require settlement in USD and does not need clearance through Swift.
Internet Money is laying the foundation for surpassing the Financial Sanctions, enabled by its decentralised architecture. Outcome of the war will be remembered by History and many lessons will emerge out of it. If Western Powers fails to push back Russia it will result in decrease of Western Influence and will see a dent of the credibility of USD as World Reserve Currency. Sovereign CBDC and Digital currency may be the CenterStage of future payments.
In another scenario, If Russia starts losing the war, it may resort to Nukes. Usage of Nukes will lead into the beginning of Third World War. World is in the real danger and outcome will reshape the Humanity, Geopolitics and Financial World Order.
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Author: CA Richa Dayal
Richa is a practicing Chartered Accountant. Author can be reached at dayal_co@rediffmail.com