Crypto becomes a new tool in war as Ukraine and Russia leverage digital currencies

The first big crypto conflict… The war in Ukraine has boosted demand for crypto on both sides of the fight, helping to lift the price of Bitcoin nearly 25% since the start of Russia’s invasion — and thrusting decentralized finance (DeFi) into a major military conflict. How crypto is impacting the war so far:

• Crowdfunded resistance: Ukraine has raised over $35M in crypto to finance its ops. After Ukraine’s deputy PM tweeted a link to a digital wallet, donations poured in from around the world. Still, Ukraine’s crypto war chest is tiny compared to the $270M it’s raised from war bonds.
• Sanction resistance: Russia can also use crypto to blunt the damage of sanctions, since crypto transactions are harder to block. Russia’s access to global banking is mostly frozen and its currency is nearly worthless — but it can still spend bitcoin.
• Exchange resistance: Ukraine officials asked crypto exchanges to bar all Russian users from their platforms, but Coinbase, Kraken, and Binance refused to pull the plug. Kraken’s CEO said a ban would contradict bitcoin’s “libertarian values.”

A geopolitical X factor… Russia wouldn’t be the first country to use crypto to get around sanctions: Iran and North Korea have reportedly deployed crypto after being frozen out of global markets. Analysts are concerned Russia and China could do the same, and both countries are also rolling out state-sponsored digital currencies.