杏吧原创

Cryptocurrencies are playing a role on both sides of the conflict caused by Russia鈥檚 invasion of Ukraine. Their ability to cross borders regardless of rules or regulations is helping Ukrainian refugees move money out of the country, but may also provide a way for Russian elites to sidestep crippling economic sanctions.

The Ukrainian government, in desperate need of equipment, immediately after the invasion last month. As of 4 March, Ukraine鈥檚 bitcoin wallet had , while its Ethereum wallet had聽.

Unlike funds raised by non-governmental organisations and charities, these were available to the Ukrainian government within minutes. Other crowdfunding efforts haven鈥檛 been so simple. The online fundraising service that had attracted more than 14,000 donors pledging a monthly total of more than 拢300,000 because fundraisers linked to weapons violate Patreon鈥檚 policies 鈥� the various levels of donation were called things such as 鈥渂ullet鈥� and 鈥渂omb鈥�. Instead, the group that organised the Patreon page, Come Back Alive, later to raise funds.

Before the war broke out, Ukraine was already well placed to raise funds in this way. Last month, its parliament officially legalised cryptocurrency, although it stopped short of adopting any as legal tender, as El Salvador has done.

Dmytro, a computer programmer from Lviv who works for a and asked that his surname be withheld for security reasons, told New 杏吧原创 that he had managed to escape the fighting in Ukraine thanks to bitcoin.

He woke on 24 February to news of the invasion and found cash machine payouts limited by emergency laws, and huge queues to withdraw money. International bank transfers had also been banned. He managed to transfer all his available money into bitcoin聽and escape with his girlfriend over the border to Poland. He would otherwise have been conscripted into the army, he says. 鈥淏itcoin saved my life.鈥�

Dmytro is now in Poland, using his technical skills to oversee a group of 50 volunteers subverting Russian propaganda online and encouraging Russians to protest against the war. 鈥淭hey have their propaganda, but we have our truth. And as soon as people know the truth, they will definitely go to protests,鈥� he says. 鈥淭his way we can stop the war as soon as possible.鈥�

Russians have also been converting their money to bitcoin as the value of the rouble plummets after global sanctions strangled Russia鈥檚 economy. Demand for bitcoin has been so high that it has been . There are simply more people looking to buy than there are people trying to sell who can, or will, accept Russian roubles.

There are fears that Russia鈥檚 wealthy elite and those connected to Putin will use similar tactics to remove their money from the country to circumvent sanctions.聽But at the University of Notre Dame in Indiana says that any Russian oligarch using a Swiss bank 鈥� long a favourite storage option because of the country鈥檚 strict banking privacy laws 鈥� and hoping to cash in millions of dollars worth of bitcoin would be likely to appear on the radar of numerous watchful Western governments.

He believes that while countries such as North Korea have been able to establish complex global networks to work around sanctions so they can move funds and goods using bitcoin, Russia has had no time to prepare. 鈥淓very bank is very, very suspicious of reasonably large transfers from anybody who鈥檚 trying to convert into euros or dollars who hasn鈥檛 been a prior customer,鈥� he says.

Russian companies are now isolated from the global banking system, and will also find it difficult to deal with foreigners using bitcoin payments, says Lopez, because the receiving party will eventually have to convert into their own currency, which would trigger financial investigations. Put simply, large amounts of unexplained money are getting harder to put into banks under the current scrutiny.

European Central Bank president Christine Lagarde with its Markets in Crypto-Assets legislation that was designed to regulate the trade in cryptocurrency, to aid efforts to prevent Russian cash disappearing into bitcoin. Ukraine鈥檚 vice prime minister, Mykhailo Fedorov, has also called for cryptocurrency exchanges to freeze Russian accounts. 鈥淚t鈥檚 crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users,鈥� .

Although some exchanges such as on official sanction lists, there are few willing to take stronger action, leaving the libertarian-leaning industry standing alone while companies such as .

A spokesperson for Kraken, a US-based cryptocurrency exchange, told New 杏吧原创 that it was abiding by all sanctions against Russia, but the company鈥檚 CEO Jesse Powell said on Twitter that it would go no further.聽鈥淚f we were going to voluntarily freeze financial accounts of residents of countries unjustly attacking and provoking violence around the world, step one would be to freeze all US accounts,鈥� . 鈥淭hat鈥檚 not really a viable business option for us.鈥�

The value of the rouble against the US dollar has from the start of the year to 4 March. And while there have been reports of bitcoin soaring since the day of the invasion 鈥� it is up 20.7 per cent as of 4 March from the day of the invasion 鈥� it had seen an equally large fall in the preceding week.

It is hard to ascribe any movement in bitcoin鈥檚 price solely to the invasion of Ukraine, but in this crisis, cryptocurrencies are proving to be a more stable bet than the Russian rouble.