Russia-Ukraine war shines a spotlight on cryptocurrency

As the war between Russia and Ukraine rages on for the seventh day, it has brought into focus cryptocurrencies and their use. The Ukrainian government appealed on Twitter for cryptocurrency donations following its invasion by Russia.
 
Ukraine's Vice-Prime Minister Mykhailo Fedorov tweeted the wallet addresses for donations.
 

Stand with the people of Ukraine
Now accepting cryptocurrency donations. Ethereum. Bitcoin and Tether (USDTtrc20)

BTC - 357a3So9CbsNfBBgFYACGvxxS6tMaDoa1P

ETH - 0x165CD37b4C644C2921454429E7F9358d18A45e14

USDT (trc20) - TEFccmfQ38cZS1DTZVhsxKVDckA8Y6VfCy

— Mykhailo Fedorov (@FedorovMykhailo) February 26, 2022

 
He also urged crypto exchanges to block the addresses of Russian users. "It's crucial to freeze not only the addresses linked to Russian and Belarusian politicians but also to sabotage ordinary users," he tweeted.
 

I'm asking all major crypto exchanges to block addresses of Russian users.

It's crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users.

— Mykhailo Fedorov (@FedorovMykhailo) February 27, 2022

 
According to blockchain analysis firm Elliptic, $35 million in digital currency has been donated to Ukraine's government and non-governmental organisations there since the start of Russia's invasion.
 
Elliptic Chief Scientist Tom Robinson said that most donations to date have been in Bitcoin and Ether. Some people are sending non-fungible tokens, or NFTs, to the Ukrainian government's Ethereum account.
 
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To date, it has received 35,000 donations, including $5.8 million from Gavin Wood, the British programmer who co-founded Ethereum. There have been several other donations of more than $1 million.
 
Ukraine: Crypto capital of the world?
 
A report by New York Times in November last year highlighted the efforts of the Ukrainian government to promote cryptocurrencies in the country and examined if it can become the "crypto capital of the world".
 
In February, at a time when tensions were building up with Russia, Ukraine's Parliament adopted a law on virtual assets to legalise crypto exchanges and cryptocurrencies. "Today we made one more step forward: Parliament adopted a law on virtual assets! This will legalize crypto exchanges and cryptocurrencies, and Ukrainians could protect their assets from possible abuse or fraud," Fedorov said in a tweet.
 

Ukraine is already in top-5 countries on cryptocurrency usage. Today we made one more step forward: Parliament adopted law on virtual assets! This will legalize crypto exchangers and cryptocurrencies, and Ukrainians could protect their assets from possible abuse or fraud.

— Mykhailo Fedorov (@FedorovMykhailo) February 17, 2022

 
Ukraine has been one of the early adopters of cryptocurrencies. According to blockchain data platform Chainalysis' 2021 Global Crypto Adoption Index, Ukraine was ranked in the fourth position. The index was topped by Vietnam, followed by India and Pakistan.
 
"Eastern Europe is home to two of the highest-ranked regions on our 2021 Global Crypto Adoption Index: Ukraine and Russia," Chainalysis said. One possible reason for cryptocurrency's popularity in Eastern Europe, and especially in Russia and Ukraine, is widespread distrust of institutions, it added.

Also Read: Cryptocurrencies still in green even as equity markets struggle
 
In fact, Ukraine topped the platform's Global Crypto Adoption Index for 2020.
 
Impact of war on cryptocurrencies
 
According to data from CryptoCompare, Bitcoin trading denominated in the Russian rouble went into overdrive when the invasion began on Thursday. Daily volumes rose 259 per cent from a day earlier to 1.3 billion rouble or $13.1 million.
 
In Ukraine, crypto exchange Kuna saw its daily trading volume more than treble to 150 million hryvnias or $5 million.
 
On the day of the attack, about $300 million short bitcoin positions were liquidated, Coinglass data showed, while Singapore-based QCP Capital said: "a good portion" of leveraged long positions had been taken out.
 
On Wednesday, even as global markets struggled amidst the war, cryptocurrencies traded in the green. Bitcoin, the largest cryptocurrency by market cap, rose by 2.64 per cent in the last 24 hours. The ETH token of the Ethereum blockchain also went up by 3.26 per cent. USDT Tether, which is a stablecoin, rose by 0.01 per cent.
 
Bitcoin, USDT Tether and Ethereum also saw a significant rise in their volumes traded in the last 24 hours. The BNB token, native to the Binance exchange, zoomed up by 4.49 per cent and the USDC stablecoin went up by 0.01 per cent.

(With inputs from agencies)
 
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