War and Art: Cryptocurrencies and NFT works in the Ukraine sector
Like many technologies that have accelerated their development, digital currencies and art are also raising their heads in the war in Ukraine.
This is how they affect the front
Tal Nebro
06/04/2022
Wednesday, 06 April 2022, 08:30 Updated: 10:32
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The war that has been raging in Ukraine in recent weeks is historic in many ways.
Among other things, this is the first conflict in the world where the use of crypto technology is of paramount importance.
Like many other technologies that wars have accelerated their development, the use of digital currencies for the purposes of money transfers, fundraising and bypassing existing economic systems has received a tremendous boost following the events of the war.
Several ways can be identified in which crypto and NFT affect the Russian-Ukrainian front.
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With Russia's invasion of Ukraine, it was subjected to severe economic sanctions that effectively cut it off from the global economic system.
The United States has also banned American companies from trading with a number of Russian personalities and entities.
As a result, the value of the ruble dropped dramatically, and the money of the citizens of Russia lost its value.
In light of this, many have speculated that digital currencies, particularly Bitcoin, will be used as a means of enforcing these restrictions.
The image of crypto as a means of virtual barter, which takes place in the dark and is therefore particularly suitable for money laundering, has stood the test here.
The leaders of the crypto industry were quick to make it clear that there was a follow-up on the transactions being carried out on the blockchain and that they were in line with the sanctions against Russia.
The CEO of Coinbase, the leading crypto trading platform in the United States, declared in an interview that his company is subject to US law like any other company. "We block transactions from IP addresses belonging to those who are subject to sanctions," he wrote on his Twitter account.
At the same time, since the beginning of the war there has been a marked increase in ruble conversion transactions to currencies such as Bitcoin and Tether.
Some of it may indeed come from oligarchs trying to cement their money, but on the other hand innocent Russian citizens also use this option to try to save their savings.
At times, the use of crypto in this context, often stems from a real lack of choice, as evidenced by reports of Russian tourists getting stuck in resorts after the unexpected invasion.
Their credit cards were canceled following the credit card companies' decision to stop working with customers in Russia, and payment in crypto has become for them the only way to continue to finance their livelihood.
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Ukraine at the forefront of crypto technology
Ukraine is ranked as the fourth country in the world in terms of the rate of crypto adoption, and in recent years it has actively encouraged crypto companies to move their activities to the country.
In February this year, just 6 days before the invasion of Russian forces, the Ukrainian parliament passed groundbreaking legislation regulating the use of crypto in the country.
In mid-March, Vladimir Zlansky signed another law making legalized cryptocurrencies and other digital assets in the country.
For the millions of Ukrainians fleeing their homes, crypto is a convenient way to take their money with them in a reality where the country’s economy is in danger of collapsing.
After money transfers and foreign currency withdrawals throughout Ukraine were suspended at the start of the invasion, the volume of crypto transactions in the country reached a peak.
While the use of digital currencies is not ideal in conditions where the Internet infrastructure is not always reliable, technological advances now make it very easy to transfer funds.
"Bitcoin is a perfect war asset, unfortunately," Swan Bitcoin analyst Sam Calhan said in an interview with C-Net.
"It's a very different property from things like gold or art that hang on walls or are stored in bank safes. People can cross borders without anything being confiscated, and with 12 words kept in their head they have access to their money again."
"It's a very different asset from things like gold or art hanging on walls or stored in bank safes. People can cross borders without anything being confiscated, and with 12 words kept in their head they have access to their money again" (Photo: GettyImages, Lightrocket)
Tal Nebro (Photo: Yachz)
The establishment of crypto technology in Ukraine is reflected in the widespread mobilization of digital currencies to finance the fighting and support the victims.
A few weeks ago, the Ukrainian government set up an official website inviting people from all over the world to donate crypto for the Ukrainian people.
"Help Ukraine with crypto, do not leave us alone with the enemy," shouts the headline on the site, which notes that more than $ 70 million has already been donated in this way.
It can be assumed that Zalanski's legislative measures stem from the desire to use these funds in as many ways as possible.
The crypto companies, many of which are active in Ukraine, have also joined the fight by facilitating and discounting their Ukrainian users.
At the same time, the sale of NFT works has become a particularly effective means of raising funds for the Ukrainian people.
While the Ukrainian government has sold official promissory notes, independent associations of artists have raised funds by selling images of the Ukrainian flag as an irreplaceable token.
After Russian activist outgoing Pussy Riot band, Nadjda Tolukonikova, supported the project, one of the flags sold for more than $ 6.7 million.
The NFT community in Ukraine has even launched the first "museum" of its kind in the world called "Meta History: War Museum".
The project managed to raise more than half a million dollars for Ukraine already on the first day of the sale of its virtual exhibits.
Creators from all over the world are launching additional projects that are being sold in the NFT trading arenas in what is arguably the first mass crypto recruitment in history.
NFT technology has become an accessible means of raising funds (Photo: ShutterStock)
While it is not clear when the war in Ukraine will end, it can already be said with certainty that one of its consequences is the strengthening of crypto as an economic means that is resilient to local crises.
At the same time, NFT technology has become an extremely efficient and accessible global fundraising tool.
Even those who doubted the future and feasibility of these inventions, can not ignore their central role in the current crisis.
Will crypto turn out to be Zalanski's secret weapon, and what will be its long - term role in the economic system of each of the parties?
We'll have to wait and find out.
It is already clear, however, that states will no longer be able to ignore the need to regulate in legislation the use of new assets of the virtual age.
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