A war rages on Europe’s eastern rim, having already left thousands of people dead and injured and millions more displaced. Digital assets have become so woven into the global financial system that a major political and economic crisis like the one unfolding right now has crypto inevitably involved on all levels: individual, institutional and national. From Russian nationals turning their burning passports into nonfungible tokens (NFTs) to refugees using crypto as a last financial resort, millions of dollars worth of crypto donations flowing to Ukraine, and both digital asset platforms and the United States government weighing crypto sanctions against Russia, cryptocurrencies play a significant role in the events surrounding the ongoing calamity. It is also evident at this point that the crisis, in turn, will massively affect crypto itself, accelerating its adoption and regulation globally.

One of the most conspicuous narratives picking up steam in the wake of the conflict’s escalation has been the notion that Russia could move fast toward embracing crypto as a potential tool for circumventing the unprecedented economic and financial sanctions it is now facing. This prospect has regulators in both the United States and European Union so uneasy that both Federal Reserve Chair Jerome Powell and European Central Bank President Christine Lagarde have called for lawmakers in their respective jurisdictions to ramp up work on regulatory frameworks for digital assets. Many industry experts, however, are skeptical of the idea that crypto offers a viable workaround for the increasingly isolated Russian state. The points most frequently invoked in support of this argument are distributed ledgers’ transparency and the notion that the