Crypto Providing Safe Haven in Times of Crisis

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During times of crisis, citizens of countries experiencing political and economic difficulties have frequently sought refuge in cryptocurrencies, especially the stablecoins. The likes of Turkey, Ukraine and even Russia examples come to mind here.

To begin with for instance, according to some reports earlier this June, demand for Tether (USDT) in Turkey has been high since May due to historic inflation of the Turkish fiat lira.

Again, following the country's central bank's move to restrict cash withdrawals shortly after Russian forces invaded Ukraine in late February of last year, prominent cryptocurrencies such as bitcoin (BTC), ethereum (ETH), as well as USDT, traded at premiums versus the Ukrainian fiat Hryvnia.

A similar incident played out in Russia few days ago in the aftermath of the Wagner Group insurrection as Russia was almost at the brink of a civil war.

The Wagner Group which is a private Russian paramilitary organization on the 23rd of June, 2023 staged a rebellion against the government of Russian. The revolt erupted amid rising tensions between the Russian Ministry of Defense and Wagner commander Yevgeny Prigozhin.

However, during the Wagner mercenary group's brief insurrection that rattled the government, Russian citizens sought refuge in Tether, a USD pegged stablecoin. The trading volume of the US dollar-pegged stablecoin in Ruble increased during the short-lived uprising, according to some sources. The Wagner-related unrest led to a day where Russians traded Tether worth millions of dollars.

A blockchain data firm Ccdata reveals that trading between the Russian fiat (Ruble) and the Tether (USDT) surged to almost $15 million in value, or close to 1.3 billion Rubles as Russians seemingly sought for safe haven with cryptocurrencies.

However, an increase in the trading volume does not directly indicate that Ruble users were buying Tether. The surge, however, is attributed to the fact that market participants seek a less volatile asset, such as USDT vs Ruble.

Even though crypto is volatile in nature, these events above have shown how cryptocurrencies, even stablecoins save citizens in times of crisis, whether political or economic and as such ought to be embraced by most nations without the seemingly restrictions here and there.