Cryptocurrencies and war: an opportunity or a threat?
The recent escalation of the war conflict has highlighted the role of cryptocurrencies in crisis situations. Some proponents of these digital currencies see them as an alternative to fiat money, which can lose value or be restricted by international sanctions. Others, however, consider them a source of instability and risk, which can facilitate illicit financing.
How does the war affect cryptocurrencies?
The war between Russia and Ukraine has had an impact on the cryptocurrency market, both globally and locally. On the one hand, geopolitical uncertainty has caused a drop in the price of bitcoin and other cryptocurrencies, due to increased risk aversion on the part of investors. On the other hand, demand for cryptocurrencies has grown in both countries, as a way to protect themselves from inflation, exchange restrictions and economic sanctions.
According to data from Coin Dance, bitcoin purchases in Russian rubles reached their highest level since May 20211. Likewise, according to data from Chainalysis, Ukraine is the second country with the highest adoption of cryptocurrencies in the world2. Both countries have a strong presence of actors related to the crypto ecosystem, such as miners, developers, companies and users.
What opportunities and risks do cryptocurrencies pose in warfare?
Cryptocurrencies may offer some opportunities to mitigate the negative effects of war on the economy and society.
They can foster innovation and entrepreneurship in emerging sectors such as digital technology.
They can contribute to monetary sovereignty and the diversification of reserves.
However, cryptocurrencies can also pose some security and stability risks. For example:
They can be used to finance illicit activities such as terrorism, drug trafficking or money laundering.#BTC☀ #BNB🔥🔥🔥🔥 #eth #USDC/USDT
