Since late February 2022, the Russian invasion of Ukraine affected all aspects of life in the two nations. Their populations have felt the war’s economic impact, including on cryptocurrency, as analysed in a recent report by Chainalysis.
Shortly after the war began, cryptocurrency transfers increased in Ukraine and steadily rose through June.
In March, right after the war started, Ukrainian hryvnia-denominated trade volume jumped 121% to $307 million. “After that, we see volumes drop off [for both Ukraine and Russia], ebbing and flowing through August, but never reaching their March highs,” the authors of the study noted.
Amid currency controls introduced under the martial law imposed by Kyiv, including restrictions on the cash purchases of US dollars or euros and transfers abroad, some Ukrainians may have looked to exchange their hryvnia holdings for cryptocurrency, according to Tatiana Dmytrenko, a high-ranking adviser in Ukraine’s Ministry of Finance and member of the World Economic Forum’s Digital Assets Task Force. Crypto trading volumes declined when these measures were relaxed in July.
In a previous report, Chainalysis ranked Ukraine third in its global crypto adoption index.
As a whole, Eastern Europe is the fifth-largest cryptocurrency market with $630.9 billion in value received on-chain between July 2021 and June 2022, which is a little over 10% of the global transaction activity during that period, Chainalysis said. The region’s “comparative role in the bigger, worldwide crypto ecosystem has stayed surprisingly consistent over the last few years” while other regions have seen more volatility, the company elaborated.
This story is an adapted version of an article published by the news section of Bitcoin.com. The Chainalysis report may be dowloaded from this page.