Today, February 17th, the Ukrainian parliament legalized crypto exchanges and cryptocurrencies to regulate what is already a top-5 country in terms of cryptocurrency usage. Although guidance from the regulating body was long overdue, it came at a critical time. Russian President Vladimir Putin has amassed over 100,000 troops on the Russian border with Ukraine, making an invasion seem ever more likely to occur if diplomatic talks continue to falter. “Ukrainians could protect their assets from possible abuse or fraud,” said Ukraine Vice Prime Minister Mykhailo Fedorovaine, announcing the new bill. As seen in every conflict, people are eager to allocate money into cash reserves and precious metals, particularly gold and platinum, which are both at 6-month highs today. In an area of geopolitical instability such as Ukraine, the government recognizes its vulnerable position. Should there be a planted uprising through Russian interference or a full-scale invasion, it gives Ukrainian citizens a way to hedge their exposure to a currency at risk. The hryvnia has seen high inflation that will also prompt a shift into more people transitioning into the world of decentralized finance.
“Double-digit gains in consumer prices have begun to ease — inflation in November slowed for a second consecutive month to 10.3% from a year earlier — reports from Ukraine’s allies that Russia may be preparing to invade have turned the hryvnia and the ruble into the region’s worst-performing currencies during the last month. That, coupled with the danger of persistently high energy and food costs, entrench expectations for faster inflation in the future.”
In the Ukrainian President’s remarks, he also emphasized the importance of cryptocurrencies in the funding of aid groups in the region. As seen in prior disasters and political movements, the transfer of money from a global audience towards issues they care to fund is easier said than done. Often, groups opposed to the cause and in power have been restrictive of funds and have engaged in asset seizures. This has been documented worldwide, from Turkish authorities seizing Covid relief funds to Nepal threatening to seize donations following their natural disaster. Russia seizing international money flowing into Ukraine could be next.
On the North American continent, a group of truckers organized a protest against the Covid-19 restrictions by parking their trucks in Ottawa, the Canadian Capital. “Government officials have said repeatedly that the Ottawa protesters blocking daily life are breaking the law. However, for these protesters, it is the police and Mr. Trudeau’s enactment of emergency measures that are unlawful and unpatriotic, not them or their actions”.
Many have offered their financial assistance in the movement by donating to the group via online sites such as GoFundMe. “Leaked data said to be from the GiveSendGo crowdfunding platform, posted last night to a now-defunct web page by anonymous hackers, lists records of more than 92,000 donations totaling more than $8 million. A review of the data shows that some $4.3 million came from Canada, while an additional $3.6 million originated in the United States, though the United States accounted for the most individual donations. Small donations from dozens of other countries made up a fraction of the total amount raised.”
After giving around 10% of the funds raised to the truckers, GoFundMe released this statement. “No further funds will be directly distributed to the Freedom Convoy organizers – we will work with organizers to send all remaining funds to credible and established charities verified by GoFundMe,” Essentially, this was a private company conducting an asset seizure of the remaining $7 million.
Ukraine, protest organizers, and relief funds have started to look for ways to maintain fund transfers in the face of a multitude of different threats, from inflation to geopolitical unrest to even unlawful asset seizures. Decentralized finance will be the way to maintain an open and available financial system for all in the face of these threats and more as we move into the next evolution of the internet and trustless banking made possible through blockchain technology.
Disclaimer: Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. Please conduct your own due diligence before making any investment decisions.
Rupam Jain Nair and Sanjeev Miglani – https://www.independent.ie/world-news/donor-concerns-as-nepal-government-announce-plans-to-seize-aid-donations-31188616.html
Bernd Debusmann – https://www.bbc.com/news/world-us-canada-60267840