Ukraine has an advantage in terms of crypto adoption over Russia, research shows, as the latter launches an invasion of Ukraine.
Chainalysis, a market research firm, rated Ukraine fourth globally in its 2021 Global Crypto Adoption Index (GCAI), which tracks the amount and value of cryptocurrency exchanged in a country.
While Russian President Vladimir Putin has authorized a full-scale war on Ukraine, with Bitcoin playing a vital role on both sides of the fight, Ukraine appears to be better prepared to embrace the fledgling financial technology.
A quick backgrounder: Ukraine declared its independence from the USSR in 1991, following the disintegration of the union.
Ukraine Has Edge In Crypto Adoption
Ukraine’s move to legally recognize cryptocurrencies under a legal framework was “progressive” and positioned the country for future foreign investment, according to Maryna Kovalenko, CEO of bitcoin tax platform Syla in Brisbane.
According to Google Trends, interest in ‘bitcoin’ has climbed slightly in the Eastern European country over the last day after surging drastically early Thursday.
Google Trends chart shows a 100% interest in bitcoin adoption as of February 24.
BTC total market cap at $663.345 billion in the daily chart | Source: TradingView.com
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Ukraine has a sizable pool of software developers ready to break into the blockchain technology space.
Last year, Dutch IT company Daxx ranked Ukraine as the most desirable country for information technology outsourcing and the No. 1 in the world for hiring programmers.
Ukraine processes more cryptocurrency transactions per day than it does in its domestic currency, the hryvnia, a 2021 report by The New York Times shows.
$8 Billion In Crypto Enters Ukraine Annually
According to The Times’ report, more than $150 million worth of cryptocurrency is traded in Ukraine everyday, and approximately $8 billion worth of cryptocurrency enters and departs the country each year.
Ukraine’s parliament enacted laws legalizing cryptocurrencies last week, laying the groundwork for a regulatory framework to effectively oversee the flow of digital assets such as Bitcoin.
Ukraine’s policymakers are optimistic that the new law and its crypto adoption would draw additional international investment into the country’s developing crypto economy, however frictions — and now a full-scale war – with Russia looks to dampen financial inflows.
Related Article | World Leaders Condemn Russia’s Attack On Ukraine – Bitcoin Takes Severe Beating
For its part, Russia is debating whether to introduce a new bill or alter existing legislation to regulate cryptocurrency as a currency in order to limit criminal activities and bring crypto-related taxes under official monitoring.
Meanwhile, some Ukrainians may turn to Bitcoin as the country’s currency dropped Thursday and the central bank capped cash withdrawals at UAH100,000 ($3,390) per day.
Bitcoin plunged to $35,205 at 09:30 UTC on Thursday, just moments after the first Russian missiles struck Ukraine’s capital city of Kyiv.
The price is still down 8% in a day and 19% in a week, wiping out all gains made in the previous month.
Featured image from Coiner Blog, chart from TradingView.com