Crypto booms in Eastern Europe amid conflict and sanctions

Eastern Europe, now the fourth largest crypto market, saw $499.14 billion in crypto inflows from July 2023 to June 2024, accounting for 11% of global value.

Crypto adoption is thriving particularly in Ukraine and Russia amidst war and international sanctions, according to a recent report by data analytics firm Chainalysis. The countries sit at sixth and seventh respectively in the global crypto adoption index.

This year, Ukraine and Russia ranked in the top 10 of our global crypto adoption index. 📈 Check out this blog preview from our 2024 Geography of Crypto Report, which explores crypto adoption trends across Eastern Europe. https://t.co/dlzWGbDaYw

— Chainalysis (@chainalysis) October 30, 2024

Considering the war and growing international sanctions, the thriving crypto markets in these countries are quite remarkable. 

According to Ukrainian crypto exchange WhiteBIT, the country's professional and institutional transfers have increased as citizens seek financial stability in the midst of war. Cryptocurrencies are being perceived as a safer alternative to the country's national currency. 

WhiteBIT added that the “trend is influenced by global factors like market volatility, inflation, and war-related sanctions, alongside growing institutional interest in Bitcoin ETFs from firms such as BlackRock”. With looming economic instability, Bitcoin is considered a long-term investment that is safer than fiat. 

Russia continues to receive large volumes of crypto from both global and domestic sources. Moreover, the number of Russian-language exchange sites not implementing Know Your Customer (KYC) policies—i.e. with lax identification requirements—have surged in recent years, peaking in mid-2023 and remaining steady to date.

According to Chainalysis, this could partially be due to “expansive sanctions against major financial institutions, driving Russian nationals to more broadly use these types of services, where they can on- and off-ramp fiat from their sanctioned Russian banks to crypto.” 

Moreover, decentralized exchanges in Eastern Europe saw the highest crypto inflow increases. This was especially evident in Belarus, Poland, Russia, and Ukraine. 

While regulatory uncertainty remains, Eastern Europe’s increasing adoption signals a strong crypto future, especially if financial instability persists.

WhiteBIT noted that “given the rapid evolution of blockchain technology and the increasing focus on regulatory frameworks, we are confident that the crypto industry holds immense growth potential. Eastern Europe, as part of the global market, is emerging as a pivotal region for blockchain adoption.”