https://ift.tt/G7aUJVu Ukraine-Russia Crisis Teaches Us 4 Initial Lessons About the Role of Bitcoin in Such Events | by Sylvain Saurel | Feb, 2022

Ukraine is besieged by Russia on multiple fronts. Shortages of all kinds are beginning to multiply. To avoid the collapse of the Ukrainian banking system, money withdrawals were first limited and then frozen. This means that the famous reserve requirement rate of the banks is once again reaching its limits.

Banks, no matter where you live, do not have all the money of their depositors at any given time. If everyone comes to withdraw the fruits of their labor at the same time, it is bankruptcy. In the current situation, we can understand why the Ukrainian government decided to do this.

While it is understandable, the fact remains that it has put millions of people in need of help at all levels. This is where Bitcoin, but also cryptocurrencies, played its role as a global P2P system that works all the time and cannot be censored.

Several million dollars of donations have been sent from all over the world to Ukrainian support groups. This money will help civilians, but also the military who will have to face the Russian army which does not relax its assaults to take the capital Kyiv. The Ukrainian government has also received financial support via donations in BTC, ETH, or USDT:

Without Bitcoin and cryptocurrencies, this aid would never have reached Ukrainians. As long as they have access to the internet, they can receive it.

I have difficulty finding precise and reliable figures, and this is normal given the current situation of chaos in Ukraine, but it is estimated that the number of refugees who have left Ukraine already exceeds 100,000 people. Some media outlets even put the number of refugees at 300,000. This number will be reached sooner or later anyway.

The majority of these refugees are going to neighboring Poland, but others may go to Hungary, Romania, or Moldova. Feeling threatened by Russia, but protected by NATO in the case of the first three countries, these countries are kind to the Ukrainian refugees, because they understand that they could end up being the next ones soon. This is a worst-case scenario, but when you see what Putin is doing, you can understand why these countries are afraid of the worst.

When they leave, these Ukrainian refugees barely have time to take their identity papers and some cash with them. Imagine if they had some of their wealth in gold. It would be very difficult and risky to transport it on the roads, where the risk of looting is high.

That’s where Bitcoin makes the difference again. All you need to do to transport your wealth stored in Bitcoin is to remember your 12 or 24-word seed phrase. You can then go to any country, just connect to the Internet and get access to the fruits of your labor.

Of course, not all Ukrainians had made the choice of Bitcoin and cryptocurrencies before this crisis. However, those who did are in a much better situation, and this is something that will push other citizens around the world to go for this solution.

The first two lessons I presented to you were positive things for the country under siege. Ukraine in this case. For the last two lessons, we enter into positive things for the country that attacks. Russia in this case. This will be pointed out by some, but Bitcoin is a decentralized system, and everyone can benefit from it. The good and the bad. You can’t be for decentralization and then complain about it. It’s unfortunate, but that’s part of the downside of decentralization perhaps.

I was already talking about this in 2021, but Bitcoin will increasingly prove to be a weapon of choice to protect against American economic sanctions. While America has control over the current monetary and financial system, it has no control over the Bitcoin network, which is headless.

Faced with the exclusion of the SWIFT system, Russia will have among its possible options, the use of the Bitcoin system. Let’s not dream too much, this will not be its number one weapon. Nevertheless, it will be part of the range of options that Putin wanted to keep under his hat. It is no coincidence that Putin has fast-tracked the recognition of Bitcoin and cryptocurrencies as currencies in early 2022.

Faced with America, a China-Russia-Iran axis has continued to strengthen in recent years. Having been excluded from the SWIFT system for several years, Iran has already shown how to protect itself from American sanctions thanks to Bitcoin and cryptocurrencies. Iran has also demonstrated how to generate money from its natural resources that cannot be sold due to the US embargo.

Iran has entered the Bitcoin and cryptocurrency mining industry at the state level. This is making profits while oil and gas sales are reduced. If Russia were to shut off the gas tap to Europe in retaliation for its exclusion from the SWIFT interbank system, the country could step up its efforts in the Bitcoin mining industry to generate profits regardless.

This would complicate the situation, but Russia would be able to resist better this way. It is not for nothing that Putin had already said in January 2022 that Russia has serious assets and interests in Bitcoin mining. The latest temptation is to denominate oil and gas sales in Bitcoin to other partners, but I don’t think this is a credible option at this stage.