The trading volume of the stablecoin USDT Tether shot up by a whopping 70 per cent in the last 24 hours. Bitcoin and Ethereum also saw a surge in their trading volume, which went up by 30.20 per cent and 17.65 per cent as of 16:30 IST, according to CoinMarketCap data.
USDT Tether, Bitcoin and Ethereum are being heavily relied upon by Ukrainian citizens as well as Russian citizens amid the ongoing Russian invasion of Ukraine.
The Central Bank of Ukraine halted digital money transfers a couple of days ago in an attempt to mitigate the economic impact of the Russian invasion. Amid tight economic regulations, Ukrainian citizens started relying on cryptocurrencies overlooking the domestic currency, the Hryvnia.
Michael Chobanian, the founder of Kuna cryptocurrency exchange based in Ukraine, told Cointelegraph in an interview that Ukrainians are relying heavily on cryptocurrencies like the USDT Tether stablecoin instead of the local currency because of the rapid inflation in the country caused by the war.
Stablecoins are cryptocurrencies that peg their market value to some external reference, for example, USD, as in the case of USDT Tether. These cryptocurrencies are relatively more stable than their counterparts like Bitcoin and other altcoins.
Furthermore, Russians are also increasing their reliance on cryptocurrencies as the war escalates. The Russian Rouble is at its all-time low and trade pairs on Binance show that Russians are swapping their Rouble for cryptocurrencies like Bitcoin, Ethereum and USDT Tether.
Cryptocurrencies have also played a pivotal role in funding Ukraine's struggle against Russia. The country has received over $35 million worth of cryptocurrencies from across the globe to support their resistance. Bitcoin, Ethereum and USDT Tether were the first cryptocurrencies that Ukrainian government started accepting last week.
Bitcoin accounted for 31.5 per cent, Ethereum accounted for 28.2 per cent, stablecoins like USDT and USDC accounted for 15.9 per cent and Polkadot accounted for 23.4 per cent of the total $35 million worth of crypto donation.
Both Russia and Ukraine introduced legislations to regulate cryptocurrencies in February, while the conflict was still brewing.
Ukraine is already in top-5 countries on cryptocurrency usage. Today we made one more step forward: Parliament adopted law on virtual assets! This will legalize crypto exchangers and cryptocurrencies, and Ukrainians could protect their assets from possible abuse or fraud.— Mykhailo Fedorov (@FedorovMykhailo) February 17, 2022
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