Funds in cryptocurrencies like Bitcoin have allowed Ukrainians to overcome the crisis they are undergoing due to their war with Russia. There are many aspects of crypto assets that will continue to help, specifically in the case of remittances.
The conflict between Russia and Ukraine has turned the spotlight on crypto assets as a means to conduct transactions during a crisis. Cryptocurrencies have allowed Russians to buy and sell amid the sanctions and the falling prices of the ruble (RUB) and Ukrainians to receive aid.
When the war started, the National Bank of Ukraine announced several measures to restrict digital money transfers. Besides stopping issuing electronic money and replenishing wallets, it suspended the foreign exchange market, limited cash withdrawal, and banned retail banks from issuing foreign currency.
Due to the restrictions, cryptocurrencies play a role not seen before in Ukraine, allowing the government to raise funds to respond to the Russian invasion. Since the onset of the attack, they opened cryptocurrency addresses and wallets to receive those decentralized currencies directly.
Ukrainians Could Use Cryptocurrencies as an Escape Route
Those owning cryptocurrencies could send funds in Bitcoin, Ether, and stablecoins to those addresses. Fundraising with crypto assets during conflicts has become increasingly important worldwide.
In late February, the trading on Ukrainian exchange Kuna reached its highest level since May 2021. That indicates that crypto assets have been the primary escape route for the affected country during the invasion. Cryptocurrencies have allowed Ukraine to overcome the economic crisis its population is currently undergoing.
The President Signs the Cryptocurrency Law to Legalize Bitcoin
In addition, the president of Ukraine, Volodímir Zelensky, enacted the Law on Virtual Assets, giving legal support to Bitcoin and other cryptocurrencies. The Ministry and Committee for Digital Transformation of Ukraine recently disclosed the information through an official statement.
The approval occurred during the donations in Bitcoin, Ether, and other cryptocurrencies that Ukraine is receiving to face the armed attack.
How People Can Use Cryptocurrencies in the Future
An analysis of the market forecasts about cryptocurrency remittances is interesting for those undergoing a crisis. Although they have been an escape route during this conflict, it is not an infallible solution since the crypto market still lacks maturity.
Users must have a sophisticated understanding of how the cryptocurrency market operates to take advantage of it during a war. They will need access to a device that works and an Internet connection, which is challenging given the circumstances of the conflict.
Cryptocurrencies cannot just fill in the gaps left by more traditional forms of international money transfers. However, many aspects will continue to help over time, specifically in the case of remittances.
Many users have taken advantage of the low transaction costs of cryptocurrencies and their higher efficiency for sending money. Besides, those assets provide a means to transfer money internationally when traditional financial networks are unavailable.
Even though cryptocurrencies are still in their infancy, they have proven to be a helpful escape route during crises. Many people are against them, but they have more benefits than cons.
By Alexander Salazar
