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After the Russia-Ukraine war, is there a crypto conflict on the cards

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Technologists and military analysts are wondering how significant a role crypto will play in the war between Russia and Ukraine. After all, Russia held more than 10% of the average monthly hashrate share in August 2021 while Ukraine is one of the top countries in terms of crypto adoption.

In the meantime, Chainalysis had some insights to share.

A crypto conflict on the cards?

The crypto analytics firm revealed that demand for trading pairs linked to the Russian ruble and the Ukrainian hryvnia registered a sharp spike.

Chainalysis noted,

“Between 2/19 and 2/24, ruble trade pairs’ daily tx volumes have grown 8.6x to $124M USD, while hryvnia volumes have grown 8.2x to $42M.”

The firm theorized that while this could be due to “illicit actors” turning their money into crypto, it might also be a way of hedging against the falling value of both Russia and Ukraine’s currencies.

What’s interesting here, is that Ukraine is also developing an electronic hryvnia based on the Stellar blockchain. However, the e-hryvnia is very different from a central bank issued digital currency. In an interview with AMBCrypto, Stellar Development Foundation spokesperson Carolyn Yi said,

“It’s important to specify that the electronic hryvnia pilot is not a CBDC. It will be privately issued e-money on blockchain technology, built under Ukraine’s current e-money legislation.”

While millions in crypto donations are being sent to Ukraine, it remains to be seen whether digital currencies will form a key part of either Russia or Ukraine’s military strategy during the war.

Another complication is that the National Bank of Ukraine put out an order to suspend the use of e-money and wallets. It is not yet certain if this applied to the e-hryvnia.

Time for the keyboard warriors

Chainalysis further observed that Russian individuals or organizations hit by sanctions were unlikely to be laundering crypto now, as they would have probably completed this before the sanctions came into force. At the same time, this doesn’t mean risks have been neutralized.

After seeing threats allegedly coming from the pro-Russia ransomware group Conti, Chainalysis stated it would track the evolving situation.

Skin in the war

Crypto investors can probably expect a high level of volatility in the market, as well as second-by-second changes as new headlines and updates pour in. Santiment data showed that in its top 10 trend algorithm, all the keywords were linked to the ongoing war. These also included terms such as China, NATO, Sanctions, and Peace.


Sahana is a full-time journalist at AMBCrypto. She has a Masters in Journalism and her areas of study include crypto-regulation, digital society, privacy, and intersectionality. Ask her about film photography and philately.
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