Russia-Ukraine: First Cryptocurrency War?
The role of cryptocurrencies in the Russia-Ukraine conflict.
Was the war between Russia and Ukraine crowdfunded with the use of cryptocurrencies, making it the first major conflict in history to occur in the cryptocurrency era?
Crowdfunding-funded conflicts are not new phenomena. In the years following its founding, Israel is believed to have raised $ 50 million from individual donors around the world for its military. In the 1970s, militant groups such as the Irish Republican Army solicited steady flows of donations from expat communities. The difference in this war is the pervasive nature of the internet and cryptocurrencies, which have become "another front" in the rapidly escalating conflict in Ukraine.
The Australian Broadcasting Corporation's science correspondent, Jamesivaliill, points out that some aspects of this war are increasingly being influenced by decentralized autonomous organizations (DAOs). DAOs are member-owned online communities that engage in crowdfunding activities outside of any government-enforced regulatory framework. They are not governed by boards of directors, but instead keep their financial transaction records on a blockchain. They therefore operate in a legal gray area, facilitated by the use of cryptocurrencies in financial transactions.
Unfortunately, in recent years, the administration of Ukrainian President Volodymyr Zelensky aspired to become the most cryptocurrency-friendly country in the world. It was therefore no surprise when, minutes after the Russian invasion of Ukraine began, the Kiev government launched an official cryptocurrency fund, called the Crypto Fund of Ukraine. As of Monday, the fund had accumulated over $ 22 million and continued to grow exponentially. Communities of pro-Ukrainian DAOs, such as Come Back Alive, have multiplied around these cryptocurrencies and raised substantial donations, which are now used to equip the Ukrainian army and volunteer militias.
There is also concern among experts that the Russian government, as well as individual pro-Kremlin oligarchs, may resort to using cryptocurrencies to evade international sanctions. In particular, the use of cryptocurrencies could allow Moscow to overcome the barriers posed by its exclusion from the Society for Worldwide Interbank Financial Telecommunications (SWIFT), which is the global standard for secure financial transactions.
Last weekend, Kiev urged the world's largest cryptocurrency exchanges to prevent Russian customers, including the Russian government, from conducting transactions. However, experts point out that it is extremely difficult to prevent specific users, including governments, from trading on the blockchain given its decentralized nature.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia-on-demand/guerra-russia-ucraina-criptovalute/ on Sat, 05 Mar 2022 07:31:39 +0000.