Russians and Ukrainians are piling into crypto

As Ukrainians battle the Russian army, and the Russian economy faces a meltdown, people in both countries are turning to crypto. The trading volumes in bitcoin using Russia’s ruble reached a nine-month high last week, while those using Ukraine’s hryvnia for bitcoin also spiked, according to Paris-based crypto research firm Kaiko.

Meanwhile, trading volumes denominated in ruble for Tether, a cryptocurrency pegged to the dollar, also surged on Monday (Feb. 28), reaching their highest point this year, according to Reuters.

Russia’s economy is faltering

The surge in ruble trading in cryptocurrencies comes as western countries imposed harsh financial sanctions on Russia, including kicking some Russian banks out of the SWIFT system and freezing Russia’s reserves. That led to a record plunge of ruble against the dollar, and many people going to banks to withdraw cash. The country’s central bank raised it benchmark interest rate to 20% yesterday, while the country’s stock market was shuttered this week.

Ukraine’s vice prime minister Mykhailo Fedorov urged major crypto exchanges to block IP addresses from Russia. Last year president Joe Biden expressed the concern that cryptocurrencies could provide an avenue to blunt the impact of US sanctions. According to the Wall Street Journal, the Biden administration is exploring ways in which future sanctions could target crypto.

Ukraine is taking crypto donations

Over the weekend, the Twitter account of the Ukrainian government called for donations in digital currencies to fight the Russian invasion. “The people of Ukraine are grateful for the support and donations from the global crypto community as we protect our freedom,” tweeted the account today, alongside a plea for donations in Polkadot, a blockchain network.

Overall, Ukraine has raised nearly $25 million in crypto and other digital asset donations since the Russian invasion, according to blockchain tracking firm Elliptic. Of the money, around $17 million was raised by the government, while millions of dollars also went to Come Back Alive, a Ukrainian NGO that provides support to the country’s military, according to the firm.

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