A 20-year-old Ukrainian man was able to escape the Russian invasion in Ukraine because he converted his savings to Bitcoin, allowing him to leave across the border into Poland with $2,000 on a USB drive.
According to an interview with CNBC, the young man requested anonymity and assumed the pseudonym Fadey because, after the invasion, Ukraine declared mandatory conscription for men between the ages of 18 to 60.
Fadey says that on the morning of February 24 he woke up to messages from friends asking him what was happening in his home city of Lviv, and then decided to flee the country upon learning that it was being invaded by Russia. To do so, he needed to get across the border before the authorities made the closure official and set up the recruitment process, and had to get a negative COVID test as well as money.
The young man told CNBC that he was unable to get cash because the queues to ATMs were very long, and couldn’t wait that much time. The solution soon crossed his mind: Bitcoin.
He contacted a friend to whom he made a transfer of about $600 worth of his Bitcoin saving for the equivalent in zloties, the Polish national currency, which he then used to pay for the border crossing, accommodations, and food for him and his girlfriend.
As Fadey stated, the speed of the transaction was the key: two hours after arriving in Poland, Ukraine made the border closure official for all men of military age.
Fadey took with him a USB stick where he had stored nearly $2,000 in Bitcoin that only he, with his unique password, could use in anywhere in the world without the need for banking or intermediaries.
Saved by the Bitcoin wallet
Ukraine’s economy began to feel the brunt of the war just hours after the Russian invasion began, so his Bitcoin holdings were the key to the financial survival of Fadey, who was unable to get his money out of the already battered Ukrainian financial system.
His net worth, he told CNBC, was split between the money he had in his Ukrainian bank account and the savings he kept on cryptocurrency exchange Binance.
Alex Gladstein, chief strategy officer for the Human Rights Foundation, which has been supporting activists in Ukraine since 2009, explained that the Ukrainian economy “shut down within a matter of hours,” so all assets were frozen. “All of a sudden, it was wartime economy. It happened in a couple of days. We’re talking of 24 to 48 hours,” he said.
Gladstein points out that the problem extends to anywhere in the world a Ukrainian goes. “How are you going to access your Ukrainian bank account in Poland? Good luck with that,” the expert said, warning that even with the laws passed to protect asylum seekers, Ukrainian refugees won’t be able to open bank accounts in other countries that easily.
However, Gladstein noted that Ukraine’s technological advancement and its “progressive jurisdiction” regarding cryptocurrencies, could bring hope for Ukrainians.
“There were tons of Ukrainian exchanges, companies, and even core developers,” Gladstein explained. “They all have phones. This is a highly connected, very IT-driven country, very computer-literate, very phone-literate, probably more than the average American.”
Thus, Bitcoin and cryptocurrencies, in general, are shaping up as an alternative for the world’s refugees to access their goods, receive remittances and exchange currency without much inconvenience.