The role of Bitcoins and the crypto industry in the conflict between Ukraine and Russia

Bitcoin (BTC) and cryptocurrencies are likely to play a role in both sides of the conflict following Russia’s large-scale invasion of Ukraine.

“The Official Twitter Account of Ukraine” uses this image showing Adolf Hitler’s art Vladimir Putin. Source: Twitter / @Ukraine

International media, including the BBC, which reported from Kiev, said long queues formed at banks in the Ukrainian capital, while citizens desperately sought to get their fingers in cash before troops reached the capital.

In a speech to the Russian people, the president said Vladimir Poutine spoke of “guaranteeing security in Russia itself”.

The BBC also claimed that a set of new sanctions was being drafted by the British government, which has already blocked the activities of two Russian state banks and five people affiliated with Putin. And mutual banking restrictions are already driving up the purchase of cryptocurrency.

Speaking to CoinDesk, Michael Chobanyanthe founder of the Ukrainian crypto exchange kunasaid there was now a “limited supply of Tether (USDT)” and the limits had “pushed the exchange rate to a fairly substantial premium.”

He stated:

‘Yes, there is financial panic. [Ukrainiens] want to get rid of their money. “

With new sanctions almost certainly on the way in the next few hours from the US, the New York Times suggested that Russia could turn to “cryptocurrencies, ransomware and the digital ruble [à venir]”in an attempt to avoid sanctions.

Since a digital ruble is still far from being implemented, conventional crypto is the most likely choice, especially given the fact that much of the world’s hashrate is in Russia. The country could also allocate more of its energy reserves to cryptocurrency mining.

Ukraine’s Foreign Ministry has called on Russia to be hit hard by sanctions and cut off from the SWIFT banking network.

The governments of the Baltic countries have called for similar measures.

Observers agree that blocking SWIFT may well be the most logical course of action for Western allies.

All of this, some say, will only force Putin and his allies to adopt cryptocurrencies, which an observer says could ultimately hurt the cause of BTC in countries like the United States.

Others agreed that BTC would likely play a key role in the dispute one way or another.

In fact, Google Trends data on Russia and Ukraine showed small but not insignificant increases in searches for “Bitcoin” over the last few hours.

Co-founder of Ethereum, Vitalik Buterinhave writing on Twitter:

“I am very outraged by Putin’s decision to abandon the possibility of a peaceful solution to the conflict with Ukraine and go to war instead. This is a crime against the Ukrainian and Russian people. I want to wish everyone security, even though I know that it will not be. “

The Guardian quoted the Admiral last month Tony Radakinleader of Britain’s Armed Forces, who warned that Russian submarine activity threatened submarine cables, which “are vital to communications systems around the world”, including the Internet.

Radakin said:

“Russia has developed the ability to endanger these submarine cables and potentially exploit them.”

He claimed that the sabotage of these cables would be an “act of war” on the part of Moscow.

Prior to the invasion, redditors from the r / cryptocurrency subgroup discussed a possible cryptocurrency rush:

“The market has plunged because people are less likely to make risky investments in times of uncertainty, but something is beyond them. They want to keep their fiat currency (which can be frozen at any time and which can not be used to buy things). in other countries) because of the sanctions). Or will they convert it into cryptocurrency that cannot be easily controlled or sanctioned by governments? “

Some have argued that citizens on both sides of the conflict are more likely to buy USD and gold on the black market than to take risks with cryptocurrencies, but others have argued that cryptocurrencies are “a natural refuge” if fiat money ” failures “- precious metals are” difficult to secure and transport. “

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