Ukraine's Vice Prime Minister has asked a major cryptocurrency exchange to stop serving Russian customers
Image Source: Crypto Potato

Ukraine and Russia record increase in crypto activity due to war: Report

A Chainalysis report shows that Ukraine and Russia recorded an increase in crypto activity because of the current war going on. This doesn’t come as a surprise because Ukraine has raised a lot of money via cryptocurrencies. At the same time, Russia has been facing sanctions from the US and EU, which has pushed them to adopt cryptocurrencies. It has become an effective way for Russia to evade the sanctions.

Chainalysis report on increased crypto activity

Russia and Ukraine’s war has been a stimulant in crypto adoption. The 2022 Geography of Cryptocurrency from Chainalysis dives deep into the economic impact the Russia-Ukraine war is having and the high inflation rates. The report shows that both Russia’s and Ukraine’s crypto transactions jumped when the war began. However, as time passed and more restrictions were placed on Russia, their transaction volume got steady. On the other hand, Ukraine has seen steady growth till June.

Ukraine and Russia record increase in crypto activity due to war: Report
Image Source: The Mobile Indian

The transaction volumes made a high during March. It was $307 million for Ukraine, which is a 121% jump, and $805 million for Russia, a 35% jump. But since making that high, the volumes have steadily declined till August. A reason for the initial hike could be the currency restrictions placed in Ukraine. It involves limited placed on USD and EURO transactions. So, a lot of users could have swapped their currency for crypto. And once these restrictions were relaxed, the trading volume saw a major dip.

Now coming to Russia, after the war began, the main question was how to get money out of the country. For that, cryptocurrencies are just the perfect tool. People also started looking for ways where they could cash out their crypto. However, the crypto markets are still not big enough that Russia can completely evade sanctions with them. But it will at least help them continue international trade without depending on the SWIFT network.

Unsteady markets conditions and the economy increase crypto adoption

The Chainalysis report clearly explains that crypto adoption happens the most when things are unstable. This war is a good example of that. Even if we look at countries that have positively adopted crypto the most, they are 3rd world nations with poor economies, high inflation, and the falling value of the local currency. That’s because cryptocurrencies solve these problems.

What are your thoughts, as reports show that Ukraine and Russia record an increase in crypto activity due to war? Let us know in the comment below. And, if you found our content informative, share it with your family and friends.

Also Read: Fintech firm Stablecorp will make cross-border payments easier.