While the ruble is falling sharply in value, the price of bitcoin and other cryptocurrencies is rising sharply. Russians seem to see the virtual coins as an alternative to their bleeding rubles, while people from the West are using them to donate to Ukraine.
Bitcoin has gained almost 14 percent in value in a week, according to figures from the website Coinmarketcap. Other major virtual currencies, such as ethereum, have also risen sharply since Russia invaded neighboring Ukraine. The Russian currency, the ruble, has lost more than 30 percent this week, fueled by Western sanctions.
Analysts consulted by Reuters news agency saw an explosive increase in cryptocurrency trading in both Russia and Ukraine after the raid. Russian citizens may see cryptocurrencies as a safer alternative to the ruble. It is also speculated that wealthy Russians who are (threatened to) be hit by sanctions, resort to virtual coins.
Ukrainian Deputy Prime Minister Mykhailo Fedorov therefore requested that trade exchanges also impose sanctions on Russians on the crypto market. However, major trading platforms have so far refrained from doing so. “Crypto aims to provide greater financial freedom to people around the world,” said a spokesperson for the Binance platform, for example. “A decision unilaterally to forbid people from accessing their cryptocurrencies would go against the very reason crypto exists.”
Digital currencies have been on the rise in recent years. Unlike normal money, they are not issued by national central banks, but are a technological innovation. Internet users can produce virtual money by using computer power, the so-called ‘mining’. Coins once in circulation can be traded.
The coins are rarely used as a means of payment, cryptocurrencies have so far been more of a speculative instrument. The prices of many currencies have exploded in recent years. Governments and central banks warn that this price explosion has no basis in the ‘real’ economy, and that prices could fall sharply again.
donations
In recent days, a strong side of cryptocurrencies has also emerged. More than 31 million dollars (almost 28 million euros) has now been acquired crypto donations entered the Ukrainian government and an affiliated NGO, reports market analyst Elliptic. This includes individual contributions of 3 and 5 million dollars. Cryptocurrencies can be transferred without going through banks, a great advantage in times of financial and political instability.
In order to receive as many donations as possible, the Ukrainian government is actively sharing addresses of ‘cryptowallets’, virtual wallets in which digital money can be written.
Ukraine / аїна
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