The Russia-Ukraine war may be the center of discussion in the last week, but there’s no denying the big role played by Bitcoin in the ongoing conflict. The use of the flagship cryptocurrency reached its peak, as citizens from both countries opted for the O.G crypto to complete most of its transactions.
Speaking of the role of BTC, Senior Strategist at Blomberg Mike McGlone thinks that the recent conflict will mark a new beginning of maturation for the crypto, as it aims to become global digital collateral. However, some experts still think otherwise.
Right from time, BTC has been branded by many experts as a currency that could replace legal tender. However, many critics have rebuffed this claim to the highest level with respect to the coin. But the dependence on the flagship digital asset over the last week suggests that this nascent coin can play a massive role in the world of finance.
The Role of BTC In the Ongoing War
Indeed, bitcoin and other cryptocurrencies have helped the Ukrainian government intensify its fight against Russia. Two days after the invasion, the country began receiving BTC, ETH, USDT, and later DOT donations from people.
On Saturday, the government made an official announcement on its Twitter page, pleading for support from everyone. This meant that it was asking for more crypto donations. Recently, the country announced an airdrop worth $5 million in Polkadot from Gavin Wood.
Although Ukraine canceled the airdrop for NFTs, there’s no doubt that its crypto crowdfunding is significant to their pursuit. As of this publication, Ukraine has received about $21 million in various digital assets from donors, of which $4.6 million and $5.6 million are in BTC and ETH respectively, according to Elliptic.
Evading Sanctions Through Crypto
Many experts opine that Russia could bypass the slew of sanctions imposed by the West and its allies by diverting into cryptocurrency. Although the Russian government has maintained a pessimistic stance on adopting virtual currencies, the digital asset class could be their lifesaver, given the financial circumstances.
With BTC and crypto in general, citizens can send money to their loved ones through wallets. This way, the financial restrictions are bypassed. Unfortunately for Russia, the U.S. has added crypto to its list of sanctions, and the E.U. is considering following in the same footstep.
Bitcoin becoming global digital collateral is also influenced by the monetary policies implemented by Central Banks. The price of virtual currencies has been volatile for the last six months, as the U.S. reserve contemplates increasing rates to counteract the inflation.
BTC thrives in inflation, as investors use it to hedge against inflation. However, an increase in rates could reduce the attractiveness of BTC if tapered down. This could slow the push for BTC as digital collateral.