For those well-read on the economic and financial pressures induced by conflict, it will come as no surprise that Ukraine ranks highly in CryptoCasino’s survey of global cryptocurrency adoption.
Researchers analysed each country against four key metrics: percentage of the population holding cryptocurrency, the cost and profit of mining one bitcoin, and search volume per 100,000 population for crypto-related keywords. In this ‘crypto-friendly’ ranking, war-torn Ukraine came in at fourth place; with over 10% of its population holding cryptocurrency, and mining costs particularly cheap – averaging around $19,530 per bitcoin. In the top spot was Argentina, with the US following in second and Columbia third.
With cryptocurrency popularity rising in recent years (ownership bloated from 432 million to 580 million in 2023 alone) some nations have had no choice but to support the growth of these industries. Ukraine is a prime example, with Russia’s invasion directly catalysing its legalisation of cryptocurrency.
Why is crypto a good defence?
In the wake of the February 2022 incursion, there was a run on Ukrainian banks, causing the Hryvnia value to dip dramatically. In response, Kyiv turned to digital currencies, such as Bitcoin, Ethereum, and Tether, for aid.
Just two days after Russia's full-scale invasion, the Ukrainian government launched a crypto fundraising campaign, which soon broadened in scope to accept over 70 different crypto assets. By March, crypto accounts were fully legalised - enabling over $200mn in crypto to reach pro-Ukraine causes, reports The Financial Times. These funds helped to purchase bulletproof vests, helmets and walkie talkies.
For a country on a war footing, there are many benefits to adopting crypto. Thanks to the asset's decentralised nature, there is no third-party bank involved, which means digital currencies can be traded at speed. This becomes a useful tool for pushing funds in and out of warzones. Indeed, currencies such as bitcoin can serve as intermediate currencies that streamline remittance across borders, to reach displaced relatives, for instance.
Decentralisation also makes the asset nigh-on immune to manipulation from governments - bad-acting or otherwise.
The dark side of crypto
One nation that did not make it onto CryptoCasino’s top-ten list is Russia. While its adoption has not been as rapid as its shell-pitted neighbour, it has turned to crypto for militia group fundraising, ransomware attacks, and to circumvent international sanctions. Nonetheless, private crypto fundraising for pro-Ukrainian causes still outpaced Russian equivalents by a rate of 44 to 1 in 2023.
There is a drive to address these issues. The European Union, for its part, is looking to push through a Markets in Crypto-Assets (MiCA) law, which will instil financial tracking systems and legal compliance for crypto. Furthermore, the International Monetary Fund published a guide on the handling of crypto assets for member countries. This seeks to provide an initial policy framework for governments.
CryptoCasino’s research shows that momentum for crypto continues to build across Europe, Asia and the Americas.
In the case of Ukraine, speed of adoption can be directly linked to its war with Russia. But with greater adoption comes greater pressure on all stakeholders to address looming uncertainties around regulation, security, and volatility – especially in a tightly globalised world.
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