Within hours of Russia’s strike on Ukraine, tensions in the country’s financial sector began to rise. Almost a fifth of Ukraine’s population has been forced to evacuate their homes in the last month. The country’s financial system has been stretched as a result of the war. ATMs around the country began to run out of cash as the invasion continued. The Ukrainian central bank banned electronic financial transactions. This scenario has shown the world the real-power of cryptocurrencies. With the borders being closed, a rapidly depreciating fiat currency. In the time of crises, Ukrainians are opting for crypto as a means of survival. It was a terrifying example of how cryptocurrency might impact survival results in an emergency.
Even before the war, Ukraine was one of the most innovative cryptocurrency jurisdictions in the world, even before Ukrainian refugees had cause to resort to Bitcoin. The government enacted a measure allowing cryptocurrency earlier this month. Gladstein, chief strategist at the Foundation for Human Rights, stated that Eastern Europe has always been interested in digital assets, with Ukraine being a well-known technological hub. The technological understanding was especially useful when Ukrainians relied only on bitcoin wallets to retrieve their saving funds. Payment technology advancements have made bitcoin transactions easier than ever before. The Lightning Network is a payment layer based on the Bitcoin foundation layer that allows for very immediate transactions.
It is used by certain Ukrainians to enable peer-to-peer transactions. Others have discovered that lightning is a low-cost and quick method of receiving donations and remittances from anywhere in the world. Constantin Kogan is a co-founder of a gaming ecosystem built on blockchain technology. He stated that one of his Ukrainian employees stayed in position but transferred his wife and children over the border with a bitcoin wallet. The employee had no idea where his family was or which border they had passed through. He did, however, have a financial security plan in place: he made regular deposits into his wife’s bitcoin wallet. He holds the majority of his net worth (about 60%) in cryptocurrencies, primarily stablecoins.
According to Chaplia, many of her Ukrainian friends have a very, very profound interest in cryptocurrencies. Moving part of the money to Bitcoin, Ethereum, and Tether was like digital gold to her. It’s a secure way to keep cash and forget about it. She admits that she was suspicious about cryptocurrencies before the conflict, but she had to give them a chance.
