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- The war between Russia and Ukraine, along with making the military conflict sure, which is presently increasing, has affected cryptocurrency.
- Natives of both countries have faced the economic impact of war and also high inflation. As reported by chainalysis in its upcoming report named Geography of Cryptocurrency.
Soon after the conflict started in February, the crypto transfers in both countries increased. After some weeks of the conflict, the trend changed. While Russian transactions fell down following the limitations and prohibitions on services, Ukrainian transactions gradually rose by June.
In March 2022, Ukrainian hryvnia-denominated trade volume plunged 121% to $307 million, whereas Russian ruble-denominated trade volume grew 35% to $805 million. The authors of the report highlighted that “after the rise volume dropped for both Russia and Ukraine by August and has neveer touched their March highs till now.”
In between the currency controls launched under the martial law implemented by Kyiv, adding limitations on the cash purchases of U.S. dollars or euros and transfers abroad, few Ukrainians may have sought to exchange their hryvnia holdings for cryptocurrency, as per Tatiana Dmytrenko, a dignified adviser in Ukraine’s Ministry of Finance and member of the World Economic Forum’s Digital Assets Task Force. Crypto trading volumes were rejected when these actions were eased in July.
Different opinions and viewpoints
Chainalysis cites a money laundering expert who opinioned on the same activity in Russia, where currency limitations were also imposed. “The main question not only for the rich class but also for ordinary Russians became, “How do you get money outside Russia?” said the specialist who urged it to be unknown. “Many started seeking for new places where they can convert their crypto,” he added, quoting the UAE, Turkey, Kazakhstan, and Georgia as authorities where Russians can have found those services.
In line with the researchers, crypto markets are barely liquid enough to back systematic sanctions avoidance; crypto can possibly play a role in funding Russia’s foreign trade after its banks were interrupted from the global payment messaging network SWIFT.
The specialist highlighted that the Central Bank of Russia recently consented to legalize crypto payments for cross-border settlements, and few companies may have so far initiated utilizing virtual assets for those transactions. From his viewpoint, stablecoins will possibly be favored as a medium of exchange as they aren’t variable like bitcoin.
Eastern Europe is the fifth-biggest crypto market having $630.9 billion worth gained on-chain in the duration of July 2021 and June 2022, as per Chainalysis.
The report highlights that the risky and illegal activity is still important when we see at Eastern Europe’s on-chain activity: High-risk exchanges – those with no or low KYC needs – account for 6.1% of transaction activity in the area,” the report further highlights.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
