The Russian invasion of Ukraine triggered a tremendous wave of emigration from both nations. Crypto is now the only real means for many migrants and refugees to take their money. The crypto market hasn’t benefited much from this, according to studies.
A study by blockchain analytics startup Crystal Blockchain showed no correlation between the conflict and migration in the hot wallets of major cryptocurrency exchanges dealing in rubles and hryvnias.
Remember that major global exchanges that used to support ruble trading pairs imposed sanctions on Russian users shortly after the war began: Binance stopped accepting payments via Russian bank cards, CEX.io suspended deposits and withdrawals for Russian and Belarussian users, and CoinZoom halted Russian account registration.
Alameda Research discovered “soaring Russian and Ukrainian trade volumes” in early March. Crystal tells CoinDesk that there hasn’t been a noticeable surge in on-chain activity, and that capital flows have fallen across a number of cryptocurrency exchanges during the last six months.
However, since the Russian invasion, the firm’s daily currency transaction volume has been dropping, with sporadic increases, according to a blog post.
Blockchain analytics company Chainlaysis also saw an increase in “Russian whales” activity, which it attributes to Russian users. Those wallets moved approximately $62 million worth of bitcoin to other addresses in March, according to Chainalysis. It’s unclear what this means or whether the expenditure was tied to sanctions evasion, the business says.
This problem was exacerbated by Russia’s invasion of Ukraine. On the journey to avoid prosecution for their anti-war attitude, Russians flee to Poland and other European nations while Ukrainians flee their ruined homes for Poland and other countries.
People who oppose war and intense anti-Ukrainian propaganda may have fled their houses in the last month, according to some estimates. Many of them wound themselves in Georgia, Armenia, Turkey, and other visa-free countries.
Visa and Mastercard halted operations in Russia, leaving Russian bank debit cards worthless outside, while Western Union, Wise, Remitly, and Moneygram followed suit.
At the same time, Russia forbade people from crossing the border with more than $10,000 in cash. On March 9, Russia also outlawed foreign currency trade for six months.
This combination of internal and international financial repression highlighted crypto as a crucial financial instrument for the new generation of Russian exiles, making it one of the few remaining methods to transfer money home. However, it will likely remain one of the “informal value transmission mechanisms” that the Russian diaspora would use in the foreseeable future, Crystal added.