Cryptocurrency and blockchain technology has the potential to change the way the world utilizes money and financial assets, especially in times of war. The role of cryptocurrency in the Russian invasion of Ukraine is one of the first major examples of the impact of crypto and blockchain technology on geopolitics. The unique features of crypto technology, such as increased privacy and portability, differentiate it from traditional fiat currency as it is not backed by a physical commodity or issued by a third party. These features allow individuals and organizations to utilize and manage their finances in novel ways. Both Ukraine, Russia, and their citizens have used cryptocurrency to raise money, evade sanctions, and withstand the financial adversities of the war. As cryptocurrency gains popularity, states, civilians, and nefarious organizations alike will continue to use the technology to their own advantage.

Since the dissolution of the Soviet Union, the relationship between Russia and Ukraine has been complicated. Recent tensions rose in October 2021, when Russia moved troops and military equipment to the Ukrainian border.[1] In December 2021, the Russian Federation demanded that the US and its North Atlantic Treaty Organization (NATO) allies immediately halt all military activity in former Soviet republics and promise not to offer NATO membership to Ukraine.[2] As Samuel Greene, a professor of Russian politics at King’s College in London, explained, “Russia may now see an opening to renegotiate the post-Soviet security landscape while Ukraine is still weak but likely to become stronger, Western nations are distracted by the pandemic and other problems and the US is more concerned with the Chinese threat to Taiwan.”[3] NATO swiftly dismissed the demands and threatened to impose economic sanctions if any military action was taken, further increasing tensions between NATO and the Russian Federation.[4] The demands suggest that Russia’s intentions are to bolster its own security in the region and to reaffirm its dominance over Ukraine.

On February 24, 2022, the Russian Federation launched a full-scale land, sea, and air military invasion of Ukraine.[5] As of April 21, 2022, the UN High Commissioner for Human Rights recorded over 5000 civilian causalities and over 3.8 million refugees fleeing Ukraine.[6] The United Nations, G7, EU, and other international organizations condemned the invasion and implemented severe sanctions against the Russian Federation.[7] Specifically, the United States banned the import of Russian oil and natural gas, sanctioned the personal financial assets of Russian President Vladimir Putin and the Russian Minister of Foreign Affairs Sergey Lavrov, and removed Russian banks from the SWIFT financial messaging system.[8] As of April 2022, the Russian invasion of Ukraine is still very much ongoing as bombings, airstrikes, and intense firefights continue. In addition to the use of these conventional military methods, both Russia and Ukraine are also utilizing a unique technology to further their interests in the war: cryptocurrency.

The war in Ukraine has been described by analysts as the world’s “first crypto war,” in reference to the increasingly important role of cryptocurrency as a financial asset. Cryptocurrency is a decentralized, private, digital currency revolutionizing the financial industry as it removes the need for a third-party, such as a bank or payment processor.[9] Unlike fiat currencies, crypto transactions are processed by a technology known as the blockchain. Blockchain is a peer-to-peer network, “meaning that those who use the currency are those who maintain and influence the currency’s market, and thus imply that individual governments have no access to control this new form of a globalized economy.”[10] The blockchain verifies each crypto transaction and publishes it to the blockchain, similar to a public ledger.[11] As a result, no government, corporation, or financial institution can claim cryptocurrency as its own or regulate its operations.[12]

Cryptocurrency’s key features differentiate it from regular currency in favor of consumers. One of these features is its portability. As an entirely digital currency, cryptocurrency is not tied to any financial institution or government and is available at any time, anywhere in the world without exchange rates or fees.[13] Another important feature is its privacy. As cryptocurrency transactions do not require any personal information, there is little risk that one’s financial information will be compromised.[14] Further, digital currencies provide equality of opportunity, meaning that as long as someone has access to a smartphone or laptop, they have the same access to cryptocurrency as anyone else.[15] There are no restrictions to use crypto, unlike fiat currency which can restrict individuals based on their credit score, income, or even geographical location. Cryptocurrency is the first alternative to traditional banking and finance systems. Its unique features guarantee economic freedom, provide borderless free trade, and act as a substitute for fiat currencies, which are often subject to inflation and restrictions during national emergencies.[16] The features of cryptocurrency can greatly impact the funding of future global conflicts and events as donations can be anonymous, fast, and free from the restrictions of the traditional financial system.

However, the unique qualities of cryptocurrency can also advance the goals of more nefarious groups and organizations. The anonymity and convenience of cryptocurrency attracts criminal activity, as they can reach consumers around the world faster and with minimal government oversight.[17] The reliability, ease, and growing popularity of cryptocurrency can facilitate transnational crimes such as terrorist financing, money laundering, and drug trafficking whilst helping offenders evade detection by law enforcement and government bodies.[18] The benefits of using cryptocurrency to fund criminal activity far outweigh the risks and offer a more lucrative alternative to fiat currency for criminals.[19] Cryptocurrency can benefit citizens and government organizations as well as heinous criminal organizations in advancing their objectives. In the current war between Russia and Ukraine, both the positive and adverse implications of crypto technology will influence the developments and outcome of the conflict.

In Ukraine, cryptocurrency is very popular and increasingly adopted by citizens and public officials alike. Over 12% of Ukraine’s population own crypto, the highest percentage of any national population in the world.[20] Ukraine even has a Ministry of Digital Transformation,  dedicated to assisting in Ukraine’s transition from traditional financial mechanisms to cryptocurrency and blockchain technology.[21] The role of cryptocurrency in the war on Ukraine is one of the first examples of the potential impact and use of cryptocurrency by states and citizens to raise money, evade sanctions, and withstand the financial adversities of war.

Ukrainian citizens, leaders, institutions, and corporations are utilizing cryptocurrencies like Bitcoin and Ethereum in a number of different ways. One of the most effective methods in which cryptocurrency is currently being used during the war on Ukraine is as an alternative to traditional Ukrainian financial institutions.[22] The Ukrainian government suspended electronic cash transfers and withdrawals, closed ATMs, and limited access to personal bank accounts as a result of the war.[23] However, cryptocurrency is beyond the control of any single institution or state and is easily transportable.[24] Ukrainian refugees who previously invested in cryptocurrency can continue to utilize their cryptocurrency wallets in other states with no impact on the value of their money.[25] Those lucky enough to find refuge in other states can freely spend their cryptocurrency or exchange it for foreign currencies, facing no hardships as a result of the inflated Ukrainian hryvnia.

The war is also demonstrating the endless potential of cryptocurrency as a tool for grassroots fundraising. Alex Bornyakov, Ukraine’s Deputy Minister of Digital Transformation, initiated the Crypto Fund of Ukraine in partnership with the Ukrainian cryptocurrency exchange KUNA.[26] Since the start of the war in February, the Crypto Fund of Ukraine received over $50 million in donations from corporations, charity funds, and individuals alike.[27] The Ukrainian government exchanged the cryptocurrency for fiat currency to purchase equipment and weapons for the military as well as gas, medical supplies, and food for civilians.[28]

The Russian Federation’s recent investment and interest in cryptocurrency also provide benefits to its side of the war. American government officials expressed their concern that crypto and blockchain technology could “dull the impact” of economic sanctions placed on the Russian Federation.[29] Tracking cryptocurrency transactions can be difficult and not all exchanges confirm the identity of customers for each transaction.[30] Due to its innate privacy and complexity, crypto technology could allow businesses and states to hide transactions and continue dealing with Russia, despite worldwide sanctions.[31]

To make matters more complicated, the Russian Federation is one of the world’s leaders in bitcoin mining, an energy-intensive process in which computers verify crypto transactions and earn Bitcoin as a result. Bitcoin mining has become a popular method to evade energy sanctions, as energy is used to earn crypto rather than sold in international markets. Bitcoin mining is especially popular in Iran. Since Iran cannot sell its energy reserves due to international embargoes on its natural resources, it utilizes its energy to mine and sell bitcoin, thereby selling its energy reserves on the global market through bitcoin mining.[32] This method allowed “the country to circumvent trade embargoes and earn hundreds of millions of dollars in crypto assets that can be used to purchase imports and bypass sanctions.”[33] As 4.5% of all bitcoin mining occurs in Iran, there is a 4.5% chance that any Bitcoin transaction will involve the buyer paying a fee to a Bitcoin miner in Iran.[34]

The Russian Federation has heavy ties to cybercrimes and illegal activity related to crypto technology, such as money laundering and ransomware.[35] Chainanalysis, a blockchain data analysis platform, published in a report that 74% of ransomware revenue in 2021, over $400 million in cryptocurrency, went to organizations affiliated with Russia.[36] The Russian government is extremely lenient when it comes to crypto crimes. In February 2022, Russian authorities arrested 14 affiliates of the “REvil” ransomware organization. Yet analysts suggest that the arrests were purely to cool diplomatic tensions with the United States as Russia moved its troops closer to Ukraine’s border.[37] Pro-Russian separatist groups in previously Soviet states secured funding in the past through cryptocurrency donations, even though most exchanges prohibit fundraising for military activity.[38] In 2014 when the Russian Federation annexed the Crimean Peninsula, many pro-Russian groups utilized donations through cryptocurrency to fund their activities.[39] The privacy and security features of cryptocurrency do not discriminate based on which side of the war one falls on, meaning that the benefits of cryptocurrency for Ukraine are also enjoyed by the Russian Federation.

Cryptocurrency has been critiqued for being speculative or untrustworthy. However, the war on Ukraine has proven the potential for cryptocurrency to be a positive catalyst for financial security and independence from central governments or authorities. Both Ukraine and Russia benefitted immensely from prior investment in cryptocurrency during the war. Ukrainian citizens who invested in cryptocurrency before the war benefitted from their investment as cryptocurrency allowed them to protect their financial assets and use their money abroad. Although fiat currency donations far outweigh crypto donations and the technology has yet to secure a positive outcome for Ukraine, it can help average citizens survive the crisis without dire financial catastrophe. There is no doubt that the influence of crypto on future conflict and major political events will only increase as it gains popularity and becomes a more mainstream financial asset.




[1] “Global Conflict Tracker | Conflict in Ukraine,” Council on Foreign Relations (Council on Foreign Relations, April 2022),

[2] Andrew E. Kramer and Steven Erlanger, “Russia Lays out Demands for a Sweeping New Security Deal with NATO,” The New York Times, December 17, 2021,

[3] Kramer and Erlanger, “Russia Lays out Demands.”

[4] Ibid.

[5] United Nations High Commissioner for Human Rights, “Ukraine: Civilian Casualty Update,” Accessed May 2, 2022,

[6] The Council on Foreign Relations, “Global Conflict Tracker Conflict in Ukraine.”

[7] Ibid.

[8] Ibid.

[9] Coinbase, “What Is Cryptocurrency?” Accessed April 1, 2022,

[10] Sarah Durrant, “Understanding the Nexus between Cryptocurrencies and Transnational Crime Operations,” CUNY Academic Works, 2018,

[11] Ibid.

[12] Coinbase, “What is Cryptocurrency?”

[13] Durrant, “Understanding the Nexus,” 2018.

[14] Coinbase, “What is Cryptocurrency?”

[15] Ibid.

[16] Coinbase, “What is Cryptocurrency?”

[17] Durrant, “Understanding the Nexus,” 2018.

[18] Ibid.

[19] Ibid.

[20] “Cryptocurrency Ownership Data for Ukraine 2021,” Triple A (July 22, 2021),

[21] Lawrence Wintermeyer, “Ukraine Demonstrates That Cryptocurrency Is a Potent Tool for Marshaling Grassroots Support,” Forbes (March 21, 2022),

[22] Emily Stewart and Rebecca Heilweil, “War in the Time of Crypto,” Vox News, updated March 15, 2022,

[23] Stewart and Heilweil, “War in the Time of Crypto.”

[24] Ibid.

[25] Ibid.

[26] Wintermeyer, “Ukraine Demonstrates That Cryptocurrency is a Potent Tool.”

[27] Ibid.

[28] Wintermeyer, “Ukraine Demonstrates That Cryptocurrency is a Potent Tool.”

[29] Stewart and Heilweil, “War in the Time of Crypto.”

[30] Ibid.

[31] Ibid.

[32] Tom Robinson, “How Iran Uses Bitcoin Mining to Evade Sanctions and “Export” Millions of Barrels of Oil,” Elliptic (May 21, 2021),

[33] Robinson, “How Iran Uses Bitcoin Mining.”

[34] Robinson, “How Iran Uses Bitcoin Mining.”

[35] Stewart and Heilweil, “War in the Time of Crypto.”

[36] Chainanalysis, “Russian Cybercriminals Drive Significant Ransomware and Cryptocurrency-based Money Laundering Activity,” February 14, 2022,

[37] Ibid.

[38] Stewart and Heilweil, “War in the Time of Crypto.”

[39] Ibid.