Why does the war in Ukraine represent a turning point for the cryptoecosystem?

It is not surprising that, in addition to the financial, land and air offensives, the war in Ukraine is also being played out on the cyber front. But for the first time in history, the conflict is also cryptocurrency. A new dimension that rearranges the cards and forces the crypto ecosystem to take a stand.

Why does the war in Ukraine represent a turning point for the cryptoecosystem?
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When cyber war becomes crypto-financial

Ethereum is neutral; not me “: The words of Vitalik Buterin, founder of Ethereum, are without appeal and illustrate how much the war in Ukraine is causing the crypto ecosystem to react.

And with good reason, chance for the calendar, Ukraine on February 17 gave legal status to Bitcoin and other cryptocurrencies. A few days later, Russia launched its military offensive. And the Ukrainian government opened electronic wallets (wallets) to finance the war effort. Nearly $ 40 million has already been sent to the Ukrainian government in this way. And more than 50 million in total through initiatives led by various NGOs.

To continue motivating the cryptoecosystem, the Ukrainian government has announced that donors will receive “tokens” in return as a thank you. These (probably NFTs) will be an additional source of revenue for Ukraine, which will receive percentages on each resale of these tokens.

When cryptocurrencies turn into weapons of war

Digital assets are not a fashion phenomenon, a fashion phenomenon or a gimmick. In times of war or crisis, they are as important a weapon as currencies. The Venezuelan example had already suggested the possibilities. The conflict in Ukraine goes even further by demonstrating what is possible when it comes to sending donations. But also safe harbor.

For in recent days, while European economic sanctions against Russia caused the ruble to plummet by 30%, Bitcoin saw an increase of more than 15% in its value. And, of course, the country’s key oligarchs, as well as those close to the Russian government, had foreseen – at least for some – the situation. And therefore protect their assets by betting on volatile or stable cryptocurrencies.

After the SWIFT system

Disconnected from the Swift system, could Russia try to break the European embargo by betting on cryptocurrencies? In reality, the option seems delicate, as blockchain implies transparency in transactions … which seems undesirable given the context.

On the other hand, the “exchanges” are in the foreground. These ultra-powerful players in the crypto-economy, who can decide whether to block transactions or not, who can decide whether to freeze electronic wallets or not, are actually at a crossroads.

Because by not freezing Russian assets in crypto assets, stock exchanges are participating in Russia’s war system, which will lead to them being held accountable for their responsibilities. But by agreeing to do so, the platforms would deny their identity and their raison d’être and favor their disappearance and the emergence of decentralized structures in their place … which would replace them instead without being able to be frozen. The dilemma is therefore enormous: favoring centralized exchanges would make it possible to retain control … a compromise needs to be found to avoid crossing the Rubicon of total decentralization and thus the total loss of control over centralized players, which would undoubtedly have defended Satoshi Nakamoto.

This article belongs to the “Opinions” section. The author’s words do not necessarily reflect the views of Cryptonews’ editorial staff.

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