Why…

The global Covid-19 pandemic is slowly coming to an end with mask and travel restrictions slowly being lifted. The 2022 winter Olympic Games have closed in Beijing. The last 3 weeks or so, Russia has been contemplating on taking over Ukraine. Finally, on Feb 24th or so Russia has officially invaded Ukraine.

The US Foreign Policy has largely revolved around including and excluding countries from the global financial system. From the beginning (3 weeks ago), the US and other countries have threatened to cut off Russia from the major markets using sanctions. So it’s no surprise that the US and the major economic powers have put up sanctions blocking Russia from international finance. Likewise, we’ve seen sanctions used as a form of influence of other countries like Iran and North Korea.

The world’s reaction provides insight into the penalties a country can expect when going against the world order. Does this mean a country would be better off on a fully decentralized financial system like Bitcoin? Would a blockchain like Bitcoin help Russia protect its assets in the future?

At the moment Russian and Ukraine banks have limited withdrawal’s to prevent/limit bank runs These same measures could be taken by crypto exchanges, but these limits would not be applicable to currencies in crypto wallets.

Similarly, when the Taliban took over Afghanistan and the Afghan financial system collapsed. Many Afghani’s turned to cryptocurrencies as a store of value. The banks and ATMs might not function anymore, but most people have a phone that enables them to receive and transfer crypto.

Like in 2020/21 when covid hit many businesses, the strong companies rode the recovery and came out stronger and better than before. Think of Amazon, Google, Apple, and Tesla.

I hypothesize that the world has found a strong use case for cryptocurrencies. Regardless of whether you are good or bad, there’s a sense of confidence in a distributed financial system. The strongest cryptocurrencies will recover quickly and continue their dominance for the next few years.