Yes, cryptocurrencies‘ promises are alluring. Yes, when you do transfers, they are anonymous. Yes, you can transfer across borders, and there will be no restrictions or formalities like the traditional international banking system. Yes, the transfer would be done within minutes.
All this is true.
But like they say, „Half a truth is often a great lie.“
Let me reiterate the other half of this ‚truth‘.
Yes, cryptocurrencies‘ promises are alluring. Yes, it is entirely anonymous but completely transparent and trackable when you do transfers. There are numerous ways to connect anonymous addresses to a person/business since most exchanges today have a KYC similar policy. Yes, you can transfer across borders within minutes, and there will be no restrictions or formalities like the traditional international banking system, but there are regulations, and when there is a criminal intent like money laundering, it can be traced.
Cryptocurrency has been elevated and is now an integral part of the global financial system. Yes, you can hate it or raise questions on its CO2 footprint, but you can no longer ignore it. It is no more a game of ‚catch-up‘; it’s an inevitable change. And either you accept it, or you will be left behind.
War in times of ‚Crypto‘
The ongoing war is filled with many surprises, but what was not surprising was the inevitable use of cryptocurrency. Today, the key questions are:
Is it helping the Ukrainians aid their military operations, or is it helping the Russians evade the crude economic sanctions imposed by the west? Is it proving a safe haven for the Russian oligarchs?
Well, to put it in one line – cryptocurrency is a double-edged sword and has the ability to cut deep on both sides. Let us measure the depth and nature of these cuts.
The Ukrainian narrative
From the beginning of this war, we saw both the citizens and government officials actively involved in funding the war with crypto donations, in a time where banks are closed because their staff is at the frontline or had to flee the country. Generous donations from the crypto community have helped fund everything, including food, bulletproof vests, helmets and medicines.
Twittersphere turned into the new age war treasury. The Ukrainian government officials won support from many crypto stalwarts, including Gavin Wood, founder of Polkadot and Kusama, who donated $5 million worth of DOT tokens and Justin Sun, founder of TRON, who personally contributed $200,000. There are NGOs other international groups who constantly support both the humanitarian and military efforts in Ukraine.
Call it a blessing in disguise, but this is one of the biggest crypto moments where we see this new asset class is used for the public good. After this, the naysayers should not have any doubts.
Can Russians doge sanctions with crypto?
Let me begin by saying – NO, they cannot doge the economic sanctions. No, cryptocurrency is not their safe haven. Yes, Russians will try all alternative methods to save their crumbling economy, but crypto alone is not the way to save them from sinking deep in the economic black hole.
The impact of these sanctions would be in hundreds of billions of dollars. Today’s clustering technologies and analytical capabilities make it impossible to move money of this magnitude. Also, there isn’t so much crypto in the world. Russians may use it to fill in small holes, but the economic fallout with these sanctions is inevitable.
The opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Crypto Finance.
About Crypto Finance
CRYPTO FINANCE – A FINMA regulated financial institution and a member of Deutsche Börse Group, offers professional digital asset solutions in asset management, brokerage, custody, infrastructure, and tokenization for financial institutions. These include one of the first FINMA-licensed securities firms with 24/7 brokerage services, storage infrastructure and tokenization solutions, as well as the first FINMA-licensed manager of collective assets for crypto assets with an active and rule-based alternative investment fund offering. With a team of over 100 employees, the Crypto Finance Group is based in Switzerland and has a regional presence in Singapore. Since it was founded in 2017, the group has received several awards, including Crypto Valley Top 50 Blockchain Companies, Top 100 Swiss Start-Up and winner of the Swiss FinTech Award 2019.