Russia-Ukraine War Rejuvenates Crypto Activity: Chainalysis Report

• A recent Chainalysis report revealed that the deadly war between Russia and Ukraine has increased crypto-related activity in both countries.
• The blockchain analysis firm indicated that the spike in crypto transactions has been led by fiat inflation and sanctions pressure.

Life has never been the same for citizens of the transcontinental nation, Russia, and Ukraine after the disastrous war which kicked in early 2022. According to a Chainalysis excerpt from its upcoming 2022 Geography of Cryptocurrency Report, the war has affected people in all aspects of life and cryptocurrency has not been left behind. The war has left citizens of both countries battling with harsh market impact and high inflation.

Shortly after the war kicked in late February, Russian and Ukrainian transactions started experiencing an uptrend in transfers. The upward tendency continued in the weeks and months that followed.

As Ukrainian transactions continued rising steadily in the month of June,  Russian transactions quivered in rather a relatively narrow range which could be the outcome of the restrictions imposed on services.

According to Chainalysis researchers;

In March, right after the war started, Ukrainian hryvnia-denominated trade volume jumped 121% to $307 million, while Russian ruble-denominated trade volume rose 35% to $805 million. “After that, we see volumes drop off for both countries, ebbing and flowing through August, but never reaching their March highs,”

Tatiana Dmytrenko, a high-ranking adviser in Ukraine’s Ministry of Finance and member of the World Economic Forum’s Digital Assets Task Force shares that, Due to the war’s harsh market impact, Ukrainians would have opted to exchange their hryvnia holdings for cryptocurrency after the Ukrainian president, Volodymyr Zelensky, imposed martial law.

Early this year, the National Bank of Ukraine (NBU) adopted a resolution that put a limit to daily cash withdrawals in local currency and also imposed a ban on cash funds from accounts in foreign currency as well.