The ongoing conflict in Ukraine has become a stress test for crypto in many tangible ways. Digital assets have emerged as an effective means of direct
The ongoing conflict in Ukraine has become a stress test for crypto in many tangible ways. Digital assets have emerged as an effective means of directly supporting humanitarian efforts, and the crypto industry, despite enormous pressure, has largely proved itself a mature community — one ready to comply with international policies without compromising the core principles of decentralization.
But there is another vital role that crypto has filled during these tragic events: It is becoming more and more familiar to those who have found themselves cut off from the payment systems that had once seemed unfailing.
Traditional financial infrastructures don’t usually work well during military confrontations and humanitarian crises. From hyperinflation and cash shortages to the destruction of ATMs, crises can disrupt the banking system’s ability to function and threaten the money supply for millions of regular individuals.
Cointelegraph spoke with some of the people who experienced these disruptions firsthand during the first days and weeks of the war. Some of them didn’t know much about crypto and had to learn fast, while others were lucky to have had some experience with digital assets that they could fall back on.
Some of these people are from Ukraine and have directly experienced the struggles of war, while others are from Russia and had to leave the country as their ordinary lives collapsed overnight. Their stories reveal that when the world comes crashing down, it is ordinary people for whom crypto provides the last line of support, not the corrupt elites.
“Crypto was originally created so that no single government or individual could control it”
Viktoria Fox is a Ukrainian-American entrepreneur who is the founder and CEO of Polaris Capital, a cryptocurrency mining company. Her parents moved from Ukraine to the United States during the tumult of the post-Soviet Union 1990s. When the war broke out on Feb. 24, her U.S. family started receiving uneasy phone calls from their relatives in Ukraine. As Russian troops advanced into the country, the National Bank of Ukraine immediately stopped the circulation of all securities and limited cash withdrawals, creating a nationwide frenzy.
Although the central bank claimed that banking and financial systems remained “resilient” following the Russian invasion, Fox’s relatives told a different story from the ground:
“What I’ve been told is that banks are closed and all ATM machines have no more cash. After two weeks of war, my relatives, like most families, were completely out of cash.”
Since then, Fox has been sending them Bitcoin (BTC), which started to function as a cash substitute for vendors and fellow citizens — a means to pay for almost anything from food to taxis. Viktoria’s uncle used Bitcoin to compensate a driver who traveled six hours to get him from Kharkiv to the Western part of the country.
In Fox’s experience, most Ukrainians prefer to transact via established global exchanges such as Coinbase and Binance, though some rely on Ukrainian exchanges as well.
“I think it’s important to remember that crypto, particularly Bitcoin, was originally created so that no single government or individual could control it,” Fox noted. “While it would be tempting to punish the ‘bad’ Russians and reward innocent Ukrainian civilians, it defeats the whole purpose of a decentralized currency or asset.” She doesn’t believe that tightening government control over crypto would help ordinary people during this or any future war.
“For me, as an anarchist, it was a matter of ideological choice, not of comfort”
Until several weeks ago, “Andrey” lived in the Russian city of Saint Petersburg, where he was born. Andrey is a front-end developer and has some professional experience with blockchain platforms. “I probably couldn’t write a smart contract, but I sure know how to use crypto in daily financial operations,” he said. “I have experience withdrawing USDT here and there, and I never did it through bank cards. For me, as an anarchist, it was a matter of ideological choice, not of comfort.”
As Andrey headed for Berlin on the fourth day of the war, the entirety of his belongings consisted of a laptop, a pair of t-shirts and a hardware wallet holding some hard-earned stablecoins:
“I had to use them to buy plane tickets to travel inside Europe. The last thing I managed to do with my Visa card was to rent a flat on Airbnb for two weeks. I was lucky enough to have a bunch of friends in Europe, and now they help me to pay with cards when necessary. I just send them the coins.”
In the long run, Andrey admitted that he still needs fiat to buy groceries and other necessities. He has yet to learn the peer-to-peer withdrawal tools available in Europe. Still, he regards the decision to get a hardware wallet for crypto as one of the smartest moves in his life. “It’s not like I was preparing for something like this, but, you know, when living…
cointelegraph.com