Alex Bornyakov, Ukraine’s deputy minister of digital transformation, has returned to the role of cryptocurrencies in wartime. He considers them essential to help the Ukrainian military defend itself from the Russian invasion.
The role of cryptocurrencies in Ukraine
According to a report from our Decrypt brethren, Alex Bornyakov made this comment during a call on Zoom with Collective[i] Forecast. He pointed to the limitations of Ukraine’s central bank, which is curtailed in its scope of action in times of war:
“In a situation like this, where the national bank is not really in a state of operation, cryptocurrencies help to make quick transfers, […] to get results almost immediately.”
For now, cryptocurrencies are not influencing Ukraine’s extended economy, but they are showing their strengths in managing the military aspect of this war, again according to Bornyakov. Indeed, he explains that the role of cryptocurrencies is “essential in this conflict, in terms of helping our army.”
An unprecedented situation
According to the deputy minister of digital, cryptocurrency donations sent to Ukraine are now approaching $100 million. As a reminder, the government has gradually opened up donations to a wider range of crypto-assets. According to various publications by official government actors, it is now possible to send Bitcoin, Ether, USDT on Tron, Dogecoin, Binance BNB, Polkadot DOT, Solana SOL and Monero.
According to Bornyakov, President Volodymyr Zelensky “shares our view that [the current situation] could represent a breakthrough from an economic perspective for Ukraine.”
This is of course a sad advent for cryptocurrencies, but it is still an advent. Digital assets of this type are now showing their usefulness when banking systems and fiat currencies become difficult to use.
We also see this on the Russian side, even though Putin doesn’t seem to want to make use of cryptocurrencies. International countries have indeed frozen part of the Russian Central Bank’s foreign currency reserves, causing the ruble to plunge. Since then, the government has also banned banks from selling fiat currency. According to several economists, this signals the end of the ruble.
Faced with this, the emergence of elusive assets, which exist outside the conventional banking and monetary system, makes sense. This is also the opinion of the banking giant Credit Suisse. One of its analysts explained this week that the situation will lead to a new monetary order… And that this could benefit Bitcoin (BTC).