There are periods in time when the world changes, when seismic upheavals occur in what appears to be an instant. The continuing COVID epidemic and the aftermath from Russia’s conflict in Ukraine have altered the planet. These trends are being felt on a daily basis in the realm of commerce, where we are witnessing new mass adoption of digital solutions to combat volatility; shortages and lockdown effects fuelling inflation; currency volatility; and, of course, stress on global supply networks. As a result, both government and commercial enterprises throughout the world are turning to blockchain-powered crypto and business ecosystem solutions.
Background: COVID-enabled trade digitisation
The introduction of COVID raised the urgency of trade digitalization, and the war in Ukraine heightened it even more. We have learnt that digitalization alone will not prevent products from being held in customs and on ships for lengthy periods of time owing to issues with documentation processing. In many situations during the previous few years, products could not be offloaded since the paperwork workflow in those growing digital procedures still required “manual” reconciliation between parties. Even though the documentation had been digitally scanned, it still needed to be “signed and stamped” before it could go to the next step of the workflow.
Because the reconciliation phase throughout the trade ecosystem is automated, trading via public ledgers and smart contracts may reduce transaction costs to their optimum. Given the ongoing conflict in Ukraine, this skill and adaptability are important.
Blockchain-powered business outcomes are not confined to the enterprise. The effect of bitcoin acceleration in Russia and Ukraine is remarkable, reflecting variations in the legal contexts of the two nations before to the invasion.
In Ukraine, where the regulatory climate has accelerated digital currency acceptance and marketing, the government has raised large cash through NFTs and other cryptocurrency operations.
In Russia, which lacks this governmental support, the use of Bitcoin to move funds into or out of the nation has been limited. Indeed, reliance on the ruble is growing as international sanctions against Russia restrict currency transactions.
The battle demonstrates five wartime benefits for governments that encourage cryptocurrencies through regulation – benefits that benefit both the government and its citizenry.
During a battle, cryptocurrency can enhance access to finance.
As Ukrainians braced themselves for uncertain times, cash withdrawals from banks increased. To curb capital flight, the Ukrainian government has prohibited residents from purchasing cryptocurrency using local money.
Meanwhile, when the ruble fell, Russians turned to cryptocurrencies as a store of wealth because they were unrelated to, or even tied to, the local turmoil. These folks have limited access to digital currency for routine purchases. However, this wealth vehicle can offer individuals a decentralised, censorship-resistant safe haven for their resources. Throughout the crisis, crypto has grown in popularity as a safe alternate means of accessing cash.
Cryptocurrency has the potential to reduce inflationary pressures.
In times of conflict, when traditional currencies tend to fluctuate, the usage of global cryptocurrencies might lessen price and money supply volatility. Markets are searching for alternate sources of oil, wheat, and sunflower production as a result of Russia’s invasion of Ukraine. To resist inflationary pressures, individuals and small and medium-sized businesses (SMEs) should use cryptocurrencies as value shelters.