Table of Contents
- 1 Crypto Donations
- 2 Crypto is on its Way to Rescuing the Situation
- 3 The Cryptocurrency Market Has Set a New High
- 4 Donations of Non-Fungible Tokens (NFTs)
- 5 Ukraine Decentralized Autonomous Organizations (DAO)
- 6 The Massive Stage for the Cryptocurrency
- 7 Sanctions on Russia
- 8 How has Russia Reacted to the Sanctions?
- 9 Is Cryptocurrency their Solution?
- 10 The Impact of Biden’s Executive Order on Cryptocurrency and Digital Assets
When Russian troops attacked Ukraine, the entire globe took aback, and the market expected to plummet, but Cryptocurrency held its ground. When Cryptocurrency was utilized to fund tens of millions of dollars for the Ukrainian military, the business saw a gravitation change. It was wrongly suggested as a feasible means for the Russian government to avoid sanctions. Cryptocurrency has been the topic of a significant Executive Order issued by the Biden administration.
One thing is sure at this point this innovation is a critical developing factor in the global environment. This episode looks at Cryptocurrency in a geopolitical framework and how crypto is braving the industry’s geopolitical situation.
According to reports, the Ukrainian government has used crypto donations to purchase military gear such as bullet-proof jackets, drones, fuel, and night vision goggles. More intriguing is that 40% of vendors have accepted cryptocurrency payments.
Many have remarked on how unusual it is for individuals worldwide to effectively crowdsource a military operation—yet another example of how unexpected everything is.
In the middle of all the confusion and uncertainty, the developing function of cryptocurrency assets has been more apparent and on a far larger scale.
Crypto is on its Way to Rescuing the Situation
It is hard to rely on traditional banks in these circumstances since governments are likewise in chaos. As a result, the world discovered a way to use cryptography to aid warring countries.
The Ukrainian and Russian governments are benefiting from Cryptocurrency. Only time can tell if this is a beneficial or terrible thing. But, for the time being, when both nations want a system free of government intervention and are somewhat anonymous, crypto is coming to the rescue.
The Cryptocurrency Market Has Set a New High
The crypto market dropped by roughly 10% after Russian President Vladimir Putin ordered a “military action” in Ukraine. But, as is customary, it bounced back quickly. The cryptocurrency market has reached a new high, with much more than a $3 trillion market capitalization.
Bitcoin, which had fallen by 8%, has climbed by more than 15% in the previous seven days. Trades on centralized Cryptocurrency in the Russian currency and the Ukrainian Hryvnia have increased in value to their most incredible levels in months since the crisis began, according to crypto analytics provider Kaiko.
The world tastes the opportunities presented by Cryptocurrency and the blockchain network that backs them up. So many people have been affected by the cryptocurrency industry, and the financial and economic growth returns of Non-Fungible Tokens enthralled the globe.
Both Bitcoin and Ethereum, the country’s most successful cryptocurrency, has reached all-time highs. Blockchain technologies are invading territories in 2022, and Decentralized Finance (DeFi) will play a key role.
Donations of Non-Fungible Tokens (NFTs)
Donations of Crypto assets that are fungible were not the only ones that poured into the cryptocurrency wallet of the Ukrainian government. NFT fans responded to the request, providing over 200 items of digital art, as well as ENS data. The most substantial donation was a unique ‘CryptoPunk,’ approximately $200,000 in value.
Ukraine Decentralized Autonomous Organizations (DAO)
DAOs are software-enabled businesses. They enable individuals to combine forces toward a common goal and participate in value creation when those goals are met. Tokens structure dAOs, and their rules are codified in smart contracts, and they function on top of global blockchain networks like Ethereum.
Last year, decentralized autonomous organizations, or DAO, were propelled into the limelight after ConstitutionDAO collected $40 million in less than a week to acquire one of the original copies of the United States Constitution. While the constitution ultimately rejected the offer, it proved the power of software-enabled organizations to organize economic activity at internet speed.
The Massive Stage for the Cryptocurrency
Over $80 million has been raised in help between the Ukrainian government and several NGOs. While this amount is small in the big scheme of things and unlikely to change the course of a conflict, it is far from unimportant. The amount is more than a quarter of the $350 million committed by the Biden administration, and it is a striking demonstration of the promise of decentralized, international money.
Crypto has been valuable for individual Ukrainians impacted by the crisis regarding financial support from the Ukrainian government and NGOs.
Bitcoin, Ethereum, and other cryptocurrencies are, at their heart, neutral technology that anybody with internet access may use. While we embrace such neutral technologies to aid a nation’s defense against a foreign force and as a lifesaver for refugees, it leads to the question: how about their usage by individuals on the opposing side of the conflict? The Russian government, in particular.
Sanctions on Russia
Since Russia invaded Ukraine, governments worldwide have imposed sanctions on the Russian Central Bank, important Russian financial organizations and industries, Vladimir Putin, and Russian billionaires. These sanctions deny targeted individuals and corporations access to international financial services and freeze their assets in many situations.
Western nations have frozen Russia’s central bank’s assets to prevent it from accessing its $630 billion (£470 billion) in foreign currency reserves.
As a result, the rouble’s value has fallen by 22% since the beginning of the year. As a result, the cost of imported items has risen, resulting in a 14 percent increase in Russia’s inflation rate.
Some Russian banks have been dropped from the Swift international financial messaging system, used to send money worldwide. Transfers to Russia for gas supplies will be delayed due to this.
Other UK restrictions include excluding major Russian institutions from the financial system. All Russian banks’ assets have been blocked, and the Russian government and big corporations cannot obtain funds or take loans in the United Kingdom. A cap on the amount of money Russians may deposit in UK banks has been imposed, and the EU has stated that it would hit 70% of the Russian financial sector and significant state-owned companies.
How has Russia Reacted to the Sanctions?
Russia’s President Vladimir Putin has declared that “unfriendly” countries who supported these sanctions will be compelled to pay for Russian gas imports in roubles, leading the currency’s value to soar.
Russia has banned over 200 commodities, including telecommunications, medical equipment, automobiles, agricultural equipment, electrical equipment, and timber, until the end of 2022.
It also prohibits Russian enterprises from paying foreign investors and restricts interest payments to foreign shareholders who possess government bonds. It has stopped international investors from trading billions of dollars in Russian stocks and bonds.
Is Cryptocurrency their Solution?
The public has speculated on how crypto is used to avoid penalties. However, the crypto industry is too small to allow Russia to prevent them substantially.
Consider the RNB’s $630B in frozen assets. That’s 80% of Bitcoin’s market valuation and more than the whole crypto market. This amount of currency would need 5–10x the daily traded activity of all crypto assets. Therefore the liquidity isn’t there.
Also, as our Chief Legal Officer recently stated, employing open and transparent cryptography to disguise massive transactions would be significantly more complex than alternative approaches.
The Impact of Biden’s Executive Order on Cryptocurrency and Digital Assets
The executive order must be viewed as a rallying cry rather than a detailed game plan. The order contains several non-controversial policy declarations, like “we must safeguard consumers, investors, and companies in the United States” and “we must support technical developments that promote responsible production and digital assets.”
In general, the White House is attempting to balance the benefits of Cryptocurrency. It comprises financial efficiency, inclusivity, and American leadership in international capital.
Its drawbacks include criminal funding, consumer and business misuse, and regulatory arbitrage. The executive order also calls for reports from various organizational branch partners to be coordinated through the intergovernmental process.
The executive order directs a total of 23 federal government departments, institutions, and White House departments to compile massive studies on the threats posed by Cryptocurrency. Some individuals are concerned that, compared to previous EOs, Biden Management does not fully grasp the potential power of digital assets, especially as that power is being displayed on the global stage.
While the Executive Order may have seemed like a watershed moment, it is only the beginning of a long journey. One in which the whole US administration will finally attempt to comprehend the significance of this technology. It is vital that the government thoroughly investigates the hazards and the advantages of digital assets with sufficient clarity to allow the people to comment on a federal regulatory strategy.
Finally, this provides a fantastic opportunity for the sector to talk to authorities about how to embrace the transformative nature of crypto and Web3 innovations effectively.
Many digital assets enthusiasts see the Ukraine–Russia crisis as a transition that could impact the outcome of Cryptocurrency. Cryptocurrencies are addressing the inefficiencies and inadequacies of the existing financial system.
To outline, whether you think about crypto’s use in supporting a military effort or the greater attention it’s getting from the world’s central government, it’s clear that we’ve crossed uncharted territory: the next stage of crypto acceptance will look dramatically different from the previous.