The War in Ukraine is shaking up our current events and the stability of the world, as the world’s governments unite to prevent Russia from conquering Ukrainian territory and consider freezing its financial assets. This “financial nuclear weapon” as Bruno Le Maire, French Minister of Economy and Finance, called it, is the exclusion of Russia and its banks from the SWIFT network, the system for processing international interbank transactions, by the European Union. Although this decision is discussed and does not have consensus.
The role of cryptos in international politics
Economic sanctions are raining down on Moscow and diplomatic pressure is coming from all sides. Then we all thought that crypto-currencies could become a credible alternative to circumvent these sanctions, the New York Times was also concerned about this recently. While the ruble, the Russian national currency, has suffered a 30% drop.
This decision could be compared to a “siege”, but to achieve this it is essential that alternative financial solutions do not become a loophole for sanctions. For this would discredit cryptocurrencies and make lawmakers and regulators less accommodating to exchange platforms for example. Crypto-currencies now play a major role and are on their way to becoming in theory a recognized and potentially indispensable economic player.
It is then that not only cryptos, but its “institutional” and centralized actors, the exchanges (Coinbase, Binance or FTX) try to act for peace and demonstrate their role as important actors and intermediaries with political and judicial powers. This may be seen as a good thing by some who advocate international security and the interaction of different markets (traditional and crypto), but it is legitimate to raise the veil on the problems that this may raise.
Crypto-currencies, a global economic issue
Following the economic sanctions imposed by the States against Vladimir Putin’s Russia and its oligarchs, crypto-currencies seem to become a short-term alternative value. But U.S. President Joe Biden was quick to speak out on the matter, calling on exchange platforms to cooperate and freeze Russian accounts on his exchange.
The Ukrainian government, through its Deputy Prime Minister Mykhailo Fedorov, and the crypto community are encouraging donations to save the territory and sovereignty of Ukraine. Since then, millions of dollars have been sent in the form of Bitcoin, Ethereum or even USDT.
After the crypto community, it is the role of centralized players such as Binance or FTX to donate in order to help Ukraine. Binance alone has donated $10 million, while Sam Bankman-Fried, the young boss of FTX has donated $25 to each Ukrainian registered on his platform.