Trading volume for Bitcoin and other cryptocurrencies on popular Ukrainian crypto exchange Kuna surged over 200% earlier today, according to CoinGecko.
From under $1 million on February 21, trading volumes on Kuna reached highs of $4.8 million today, the highest volume seen on the exchange since May 2021, before stabilizing around $2 million.
On Thursday, Russia launched a full-scale invasion of Ukraine, and a state of national emergency in has been declared in the country, including a ban on digital money transfers.
Ukraine introduces currency controls
Tens of thousands of Ukrainians are fleeing the conflict, as Russian troops today encircled the Ukrainian capital Kyiv from the north, south, and east. The invasion could ultimately force up to five million Ukrainians to flee their homeland, according to the United Nations.
As part of its emergency measures, Ukraine’s central bank has suspended the issue of electronic money, the replenishment of electronic wallets with electronic money, and the distribution of electronic money by issuing banks. The measure is likely to affect fiat currencies held in digital accounts through platforms like Venmo or PayPal.
Pussy Riot Founder, Trippy Labs, PleasrDAO Members Launch Ukraine DAO
In the wake of Russia's invasion of Ukraine, crypto users have taken it upon themselves to raise money in support of the beleaguered nation. To that end, decentralized autonomous organizations, better known as DAOs, are spinning up to help those hurt by the invasion. Political activist and critic of Russian President Vladimir Putin, Nadya Tolokonnikova, better known as a founding member of "conceptual protest art group" Pussy Riot, announced Ukraine DAO via Twitter today, alongside Trippy Labs a...
The Ukrainian currency, the hryvnia, this week plunged to levels not seen since 2015, when the country was on the verge of default. Ukraine's central bank has responded by suspending the foreign exchange market, limiting cash withdrawals, and imposing a prohibition on the issuance of foreign currency from retail bank accounts.
Amid the geopolitical upheaval, many Ukrainians have turned to cryptocurrencies. "The majority of people have nothing else to choose apart from crypto," Michael Chobanian, founder of the Kuna exchange, told CoinDesk earlier in the week, prior to Russia's invasion of Ukraine. He added that, "We're talking about millions of dollars of cash that wants to go into crypto."
On crypto exchanges, Ukrainians are currently paying a premium for Tether’s USDT stablecoin, which is pegged to the price of the U.S. dollar.
Increasing demand for crypto in Ukraine has propelled the exchange rate for 1 USDT to 33 Hryvna ($1.10) at exchanges including Kuna and Binance. At Kuna, Bitcoin is currently trading at $40,820, while the CoinMarketCap rate is currently $38,565.21.
The USDT/UAH pair makes up the lion's share of volume on Kuna in the last 24 hours, at 29.4% of its total trades according to CoinGecko. The USDT/RUB pair makes up 16.9% of 24-hour volume on the exchange, followed by ETH/UAH and BTC/UAH, at 14.3% and 13.5% respectively.
Despite trading at a premium against the hryvnia, USDT, the most popular stablecoin by market cap, has been less affected by the volatility experienced by cryptocurrencies such as Bitcoin and Ethereum; both leading cryptocurrencies crashed on news of the invasion, before rebounding by almost 10% in the last 24 hours.
Ukraine turns to crypto
Cryptocurrencies were already popular in Ukraine prior to the hostilities unleashed on the country.
Earlier this month, the Ukraine parliament, the Rada, ratified a law that paved the way for the central bank to issue its own digital currency. Just days before the Russian invasion, Ukraine legalized Bitcoin and other cryptocurrencies, with plans to open the cryptocurrency market to businesses and investors.
Ukraine Military Group Receives $400,000 in Bitcoin Donations in One Day: Report
In 2021, about $570,000 in Bitcoin donations went to pro-military Ukrainian groups. Today alone, almost $400,000 in BTC has been sent to just one of those organizations, "Come Back Alive," according to analysis from U.K.-based blockchain analytics firm Elliptic. "This group provides support to the Ukrainian army by supporting their soldiers," Elliptic research lead Jess Symington told Decrypt over the phone. "They've received very, very small amounts of donations since August 2021—not very much...
Following the invasion, Ukrainian organizations have turned to cryptocurrency for funding; the NGO Come Back Alive, which has been suspended from Patreon for "funding military activity," raised over $400,000 in Bitcoin in a single day. Meanwhile, political activist and Pussy Riot member Nadya Tolokonnikova has launched a decentralized autonomous organization, UkraineDAO, to raise funds to donate to Ukrainian civilian organizations.
