Russia-Ukraine Conflict Shows How Crypto Can Transform The Game

March 2, 2022 4:23 pm Comments

In the middle of the Russia-Ukraine conflict, many investors are now moving their assets to crypto as a way to reduce risk and to preserve wealth.

This has been especially important as the Russian ruble has dropped significantly in value due to the weight of the sanctions.

As a result, crypto has, in a sense, become a safe haven in order for citizens to protect their assets from being frozen and to be able to evade transaction limits.

Analysts have observed that this shift may indicate a future divergence of the two different financial systems where one is vulnerable to the actions of their government while the other is decentralized and cannot be controlled by any central entity.

Yahoo reports:

Yet the crisis in Russia leaves no doubt about where things are headed for digital currencies, and explains why bitcoin and other tokens are so firmly bid.

“Ultimately, we are watching the divergence of two financial systems,” Pompliano wrote.

“The legacy infrastructure is built and run by a group of financial firms who are susceptible to the whims of their governments.

The new infrastructure is built on open-source software that is run by no single individual or organization. The decentralized nature leads to a different outcome in these situations,” he added.

Crypto’s proponents have “long promoted the idea of financial freedom and inclusion … [and] we are seeing these theories get put to the test in real-time over the last week or so. So far, so good,” Pompliano wrote.

The Ukrainian government has also received a total of $38 million in digital asset donations since the start of the conflict which include a mix of popular tokens such as Ripple, Bitcoin, Ethereum, and Polkadot.

Although the amount is not significant compared to the traditional financial system funding, many investors see this as more evidence of a booming asset class that will continue to be used more once widely accessible to the average person.

Even before the conflict, it was recorded that crypto had already surpassed the trading volume of fiat currencies which shows that mainstream adoption has nearly been achieved in some regions of the world already.

For average citizens, perhaps the most valuable aspect that will allow the industry to grow is the fact that crypto wallet holders will have complete ownership of their assets in a portable fashion.

Yahoo reports:

Vlad Panchenko, CEO and founder of the NFT and virtual in-game marketplace, DMarket, moved most of his company’s employees and their family members out of Kiev a little more than two weeks ago.

Now relocated in various parts of Western Europe, Panchenko said he and other employees transported most of their wealth using USB-sized hardware wallets.

Before war broke out, Panchenko said the Ukrainian banking system was improving. Yet out of habit, “Most people still preferred to keep their money in cash instead of banks.”

“Without a bank account or the proper papers, you couldn’t transport more than $10,000. Most of us were without papers so for me and the others a flash drive worked best,” Panchenko told Yahoo Finance.

As citizens start to rely on decentralized solutions rather than financial entities to protect their wealth during times of conflict, investors of popular assets like XRP, Bitcoin, and Ethereum stand gain all the benefits of this growing new digital asset class.

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