Columns, Opinion

Modern Toolbox: Crypto’s role in the Russia-Ukraine war

In the past few weeks, markets across the world have been nothing short of volatile. We had an invasion crash, then a sanctions pump, the 17th largest currency — the Russian ruble — has fallen more than 14% and the world continues to sit on the edge of its seat, waiting and watching for what happens next. 

As an outside observer, it’s been interesting to see the Russian military’s, and by extension the Soviet legacy’s, shortcomings specifically with logistics, rearing their head once more.

The Ukrainian people and military have put up an admirable defense. The unconfirmed legend of the Ghost of Kyiv, the infamous Canadian sniper Wali and President Zelensky have all become faces of the resistance against an increasingly totalitarian Russian regime. 

However, we cannot mistake good PR and supposed heroism for success. 

The Russian military is more than capable of establishing air superiority, which would end the invasion shortly after. NATO is unwilling to intervene, with Putin making clear that any direct military assistance by the organization would be treated as a declaration of war. 

But they haven’t. There are several theories as to why, from slow and ineffective top-down logistics instead of the more flexible request-based model used by western militaries. There’s also the idea that the Russians fully expected to be welcomed with open arms since they were supposedly sent to Ukraine to “denazify” the country and were surprised to be met by civilian militias and Molotov cocktails.

Whatever the case may be, the past two weeks have been more than embarrassing for the Russian military. And it’s caused one of the most indiscreet demonstrations of war crimes since the conception of the International Criminal Court. 

Russians are attacking civilian residences, hospitals, schools and really anything and everything, regardless of whether it’s donning military camo or not. 

Smaran Ramidi / DFP Staff

The situation has created millions of refugees that are now fleeing to Poland, Italy and other surrounding European countries. 

This is the exact situation that cryptocurrencies were designed for. 

Ukrainian banks will understandably be in crisis. Besides the inaccessibility of cash for the everyday Ukrainian, the hryvnia hasn’t been stable since the annexation of Crimea. 

Crypto was designed for an economy in crisis. Ukraine’s economy is in crisis. 

Besides the point of comparing volatility, crypto is simply more accessible right now. The everyday Vladymyr will find it difficult to go down to the bank and withdraw his cash, but he could very easily open up his phone to his crypto wallet and have complete access to his money anywhere. 

In a real-world scenario, this hypothetical Vladymyr could trade their fiat into crypto, hold that in a blockchain outside of governmental forces, withdraw that crypto into cash wherever he ends up as a refugee and have transported his money quickly and safely. 

Besides the everyday man, crypto has become an excellent method of receiving donations from all around the world. Ukraine’s Deputy Minister of Digital Transformation, Alex Bornyakov, has reported that they have received over $100 million in crypto donations. 

Simply by posting an address on a blockchain, similar to an email address, the Ukrainian government has been able to essentially crowdfund their defense efforts, something we’ve never really seen before. Around $60 million of the donations so far have been used for non-lethal equipment, such as fuel, food and bulletproof vests.

Cryptocurrencies were made by people who weren’t satisfied with entrusting the government with complete control over not only their liquidity, but also the actual value of said liquidity. When it comes to times of economic and political turmoil, crypto will be what we can all turn to as a storage of value completely out of any governmental control. 

Besides this, the cryptocurrency community, joining others, have clearly done great work in sending assistance via the blockchain, arguably one of the only dependable methods of liquidity transfer for those in Ukraine. 

The Russia-Ukraine conflict clearly demonstrates exactly where cryptocurrencies fit in the modern landscape. Accessible, quick, and reliable is exactly what a revolutionary form of currency needs to be, and the conflict has proven it is exactly those things.

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