‘I’ve never paid with crypto before’: How digital assets make a difference amid a war

In many ways, the ongoing conflict in Ukraine is a stress test for cryptocurrency. The use of digital assets has proven to be an effective way of supporting humanitarian efforts. However, the crypto industry has mostly proved itself to be a mature sector, ready to adhere with international policies, but not compromise the core principles and decentralization.

However, crypto also plays a vital role in these terrible events. It is becoming increasingly familiar to those who are cut off from payment systems that once seemed endless.

During military conflicts and humanitarian crises, traditional financial infrastructures are not always able to function well. Crisis can lead to hyperinflation, cash shortages, and the destruction of ATMs. These crises can cause disruption to the banking system and affect the money supply to millions of people.

Cointelegraph talked to some people who were affected by these disruptions in the early days and weeks of war. Some were not familiar with crypto and needed to learn quickly, while others had the advantage of having some knowledge about digital assets.

Some of these people hail from Ukraine, and they have experienced the war’s struggles firsthand. Others are Russian and fled Russia after their normal lives were destroyed overnight. These stories show that crypto is not corrupt elites but ordinary people who provide support when the world falls apart.

“Crypto was created originally so that no one government or individual could have control of it.”

Viktoria Fox, a Ukrainian-American entrepreneur, is the founder and CEO at Polaris Capital. This is a cryptocurrency mining firm. Her parents immigrated from Ukraine to the United States in the turbulent post-Soviet Union 90s. Her family in the United States began to receive uneasy calls from relatives in Ukraine after the war broke out on February 24. The National Bank of Ukraine stopped all cash withdrawals and securities from being circulated immediately after Russian troops entered the country. This created a national frenzy.

Although the central bank stated that banks and financial systems were “resilient” after the Russian invasion of Ukraine, Fox’s family told a different story.

“I was told that all ATMs are out of cash and banks have been closed. My relatives were, like many families, completely cash-starved after two weeks of war.”

Fox began sending them Bitcoin (BTC) since then. This was a way to use Bitcoin to replace cash for vendors and other citizens, as well as to pay for everything from food to taxis. Viktoria’s uncle used Bitcoin as a compensation for a driver who drove six hours from Kharkiv in the Western part to get him to the Western.

Fox found that most Ukrainians prefer to transact through established global exchanges like Coinbase or Binance. However, some people rely on Ukrainian exchanges.

Fox stated that “it’s important to remember crypto, especially Bitcoin, was created so that no one government or individual could manage it.” Fox noted that while it might be tempting to reward the ‘bad Russians’ and punish innocent Ukrainian civilians, this defeats the purpose of crypto. She does not believe tightening government oversight over crypto will help ordinary people in this war or any future.

“It was an ideological choice for me as an anarchist and not a matter comfort.”

“Andrey” was born in Saint Petersburg, Russia, and lived there until a few weeks ago. Andrey is a front end developer with some experience using blockchain platforms. He said that although I could not write smart contracts, he was able to use crypto in his daily financial operations. “I have had the pleasure of withdrawing USDT from time to time, but I have never done it using bank cards. It was an ideological choice for me as an anarchist and not a matter comfort.

On the fourth day, Andrey was heading to Berlin. His entire belongings consisted of a laptop and two t-shirts. A hardware wallet contained some hard-earned stablecoins.

I had to use them for plane tickets to Europe. My Visa card did not allow me to rent an Airbnb flat for two weeks. I was fortunate enough to have many friends in Europe who helped me pay with cards whenever necessary. They just need the coins.

Andrey acknowledged that he still requires fiat to purchase groceries and other necessities. Andrey has not yet learned about the European peer-to-peer withdrawal methods. He still considers the decision to purchase a hardware wallet for cryptocurrency one of his best decisions. It’s not that I was planning for this. But, as you know, it’s better to be independent than the local banks when you live under authoritarianism.

Andrey acknowledged that it could be a problem to withdraw crypto in a foreign jurisdiction. He stated:

“Despite my industry knowledge, I am currently in a difficult situation.” Cash withdrawals in Germany are subject to very strict requirements. I am still trying to find the best way to accomplish this.

It’s not about your personal needs. Andrey, a Russian citizen, was born in Ukraine and raised there by his father. There is no legal way for him to donate money to the relief effort for the Ukrainian civilians. This could lead to him being charged with a crime or even being considered high treason. Andrey noted:

“I have Ukrainian friends, just like many Russians. Some of them are now in Kyiv, sleeping in bomb shelters beneath artillery fire. Their problems are far worse than mine. To help them, we had to find someone who would exchange our USDT for Ukrainian currency (hryvnias). This opportunity was offered to me after I verified that my friends’ bank cards were working. Although the sum was not huge, I’m grateful that it helped at least some people.

“We were unable to receive international transfers to Ukrainian accounts.”

Anna Shakola, a Kyiv native, started working as a NFT project manager at Cointelegraph on November 2021. This was several months before the outbreak of war. She hadn’t used crypto to pay until the crisis. “Honestly, I had never paid with crypto, other than for NFT transactions. These assets were used only to invest.

Shakola learned quickly, because during the first three weeks after the war, the fiat financial systems were partially frozen.

Related: How crypto became an important source of relief in Ukraine’s crisis

After a network of crypto-fiat exchanges in the area supported the initiative, Unchain began channeling donations to Ukrainian civilians starting February 27. In cooperation with Kyiv’s Unex Bank, and Weld Money, the next step was to issue virtual gift cards called “Help Cards”. These cards were created to aid families, mothers and children, who may not have the time or resources to learn crypto during wartime. Unchain accepts crypto donations and converts them to Hryvnias at the end of the receiver. It intends to finance 10,000 Help Cards.

The war has undoubtedly shaken the global economic order and has become a major stress test for crypto industry. Although there were concerns that digital assets might undermine international sanctions, they have been rebranded as a flexible, resilient payment system that can help millions of people in their most difficult times.

It is no accident that the Ukrainian government championed measures to develop the country’s digital economy following the war. Volodymyr Zelenskyy, the Ukrainian president, signed a law on March 16 to create a legal framework to allow the country to set up a regulated cryptocurrency market. The nation’s experience in crypto will be a valuable asset to a digitally thriving economy, given the need for reconstruction after the ceasefire.

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Eileen Wilson

Eileen Wilson –Technology and Energy My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.

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