Cryptocurrency and blockchain technology acceleration in Covid19 Times

Cryptocurrency and blockchain technology acceleration in Covid19 Times

Blockchain
June 13, 2022 by Diana Ambolis
285
There are periods in time when the world changes and seismic transformations occur in an instant. The world economy has changed as a result of the ongoing COVID pandemic and the impact of Russia’s war in Ukraine. These trends can be felt on a daily basis in the realm of trade, where we’re witnessing the
Acceleration of cryptocurrency and blockchain technology in uncertain times of Covid

There are periods in time when the world changes and seismic transformations occur in an instant. The world economy has changed as a result of the ongoing COVID pandemic and the impact of Russia’s war in Ukraine. These trends can be felt on a daily basis in the realm of trade, where we’re witnessing the new widespread adoption of digital solutions to combat volatility; shortages, and lockdown impacts fueling inflation; currency volatility, and, of course, stress on global supply networks. As a result, public and private enterprises worldwide are turning to cryptocurrency and blockchain technology enterprise ecosystem solutions.

Background: Under COVID, trade is being digitized.

The start of COVID heightened the urgency of trade digitization, and the war in Ukraine heightened it much more. We’ve learned that digitization alone will not prevent products from being held in customs and ships for long periods owing to paperwork processing issues. Goods could not be offloaded in many cases during the last few years since the paperwork workflow in those growing digitized processes still required “manual” reconciliation between parties. Even though the papers had been scanned digitally, they still needed to be “signed and stamped” before the next stage of the process.

Using blockchain to address COVID-19

Because the reconciliation phase across the trade ecosystem is automated, commerce using public ledgers and smart contracts can reduce transaction costs to their bare minimum. Given the current conflict in Ukraine, this skill and adaptability are important. According to a survey published by the International Chambers of Commerce, full digitization could boost global trade by $9 trillion in five years, or 46 percent. Reduced operational expenses might help generate positive GDP growth and give credit to small and medium-sized businesses (SMEs), thereby closing the $1.5 trillion trade finance gap. This financial access will be important in the post-war reconstruction of Eastern Europe.

Cryptocurrency and Blockchain technology-enabled business results aren’t just for businesses. The impact of cryptocurrency acceleration in Russia and Ukraine is remarkable, reflecting the regulatory regimes in the two nations before the invasion.

The government of Ukraine has raised large cash through NFTs, cryptocurrency, and blockchain technology operations, thanks to a regulatory environment that has accelerated the acceptance and promotion of digital currency use.

There has been minimal use of bitcoin to transfer funds in and out of Russia due to the lack of regulatory support. In fact, the ruble’s reliance is becoming more severe as international sanctions against Russia restrict currency exchange. The battle demonstrates five wartime benefits for governments that encourage cryptocurrencies through regulation, benefits that benefit both the government and the people.

Also, read – The use of Blockchain from payments to digital identity management

During times of war, cryptocurrency can help with capital access.

As Ukrainians braced for uncertain times, the war in Ukraine resulted in a surge in cash withdrawals from banks. Ukraine’s government recently prohibited residents from purchasing cryptocurrency with local currency to curb capital flight.

Meanwhile, when the ruble fell in value, Russians turned to cryptocurrencies as a store of wealth since they were unrelated to, if not directly linked to, the local unrest. For routine purchases, these citizens can only use digital currencies to a limited extent. On the other hand, this wealth vehicle can provide citizens with a decentralized, censorship-resistant safe haven for their money. During the conflict, crypto has become a more popular way of transaction, as it is seen as a safe alternative to traditional banking.

Cryptocurrency and Blockchain technology has the potential to reduce inflationary pressures.

In times of war, when traditional currencies are prone to fluctuation, the usage of global cryptocurrencies could help to lessen price and money supply volatility. Markets are searching for alternate sources of oil, wheat, and sunflower production as a result of Russia’s invasion of Ukraine. Consumers and SMEs can protect themselves against depreciating currencies by using cryptocurrencies as value shelters to resist inflationary pressures.

Cryptocurrency and blockchain technology promotes transparency and makes funding more accessible to the general public.

Ukraine has recently raised large cash by accepting donations through crypto exchanges to help pay its Department of Defense. Ukraine is currently digital assets and cryptocurrency leader in Eastern Europe (with strong uptake even before the invasion). The Museum of War NFT assists supporters in making direct payments to the Ukrainian government without the use of an intermediary organization, hence increasing donations by guaranteeing that transactions are transparent and secure. The information is stored in a decentralized blockchain network, which makes it difficult to alter. The system is open to everyone at the same time, which contributes to transaction transparency and agility.

By boosting access to capital, blockchain can assist Ukraine in rebuilding.

Late in March, Ukrainian MPs asked to be admitted to the European Blockchain Partnership (EBP) to help with the country’s restoration. By joining the international organization, the goal of facilitating access to cross-border electronic services would be met. While typical legacy banking systems take three days to complete a cross-border transaction, blockchain networks may settle transactions in minutes.

Insights on the future of digital commerce

As cryptocurrencies and blockchain technology’s appraisal and acceptability develop, what we’re seeing now in 2022 is just the beginning. Multinational corporations should continue to investigate how to integrate their ecosystems through secure data sharing across common workflows. For example, using cryptocurrency and blockchain technology to support digital identity, supply chain provenance, and digital asset processes would enable companies to profit from new market model possibilities and encourage the agility required in unpredictable times.