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@ -82,7 +82,7 @@ See industry analysts describe this problem in more depth: [Does Bitcoin/Blockch
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One potential qualification to this analysis is the use of cryptocurrency to bypass traditional economic apparatus which is otherwise dysfunctional. The most prominent recent example has been Ukraine, where both non-state actors and the government itself have raised significant amounts of money in cryptocurrencies to support the war effort[^7]. The standard crypto-skeptic response to this is that there is nothing to stop donations being made via traditional payment rails. While this is in some sense true, the reality is more complex.
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First, traditional fundraising platforms often block use of funds for the purchase of weapons and other military equipment, which is a priority for Ukrainian forces currently. More interestingly however, it has been reported that the use of cryptocurrencies and particularly crypto tokens such as USDT in Ukraine was already relatively widespread due to widespread distrust in the government[^8] , a poorly functioning banking system[^9] and persistently high levels of inflation in the local currency. There is anecdotal evidence that this situation gave rise to a secondary economy in the cryptosphere, where direct crypto to crypto transactions were common for more expensive items[^10]. Use of cryptocurrency to purchase war supplies – which proponents engaged in these efforts claim are paid for directly in crypto itself – has also been identified as quicker and easier than trying to navigate the slow and unreliable banking system to make international purchases in a currency such as USD, even for the government itself[^11].
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First, traditional fundraising platforms often block use of funds for the purchase of weapons and other military equipment, which is a priority for Ukrainian forces currently. More interestingly however, it has been reported that the use of cryptocurrencies and particularly crypto tokens such as USDT in Ukraine was already relatively common due to widespread distrust in the government[^8] , a poorly functioning banking system[^9] and persistently high levels of inflation in the local currency. There is anecdotal evidence that this situation gave rise to a secondary economy in the cryptosphere, where direct crypto to crypto transactions were common for more expensive items[^10]. Use of cryptocurrency to purchase war supplies – which proponents engaged in these efforts claim are paid for directly in crypto itself – has also been identified as quicker and easier than trying to navigate the slow and unreliable banking system to make international purchases in a currency such as USD, even for the government itself[^11].
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Should this analysis of the situation in Ukraine and other similar contexts hold true, then the following qualifications may be in order:
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