Crises push cryptocurrencies into spotlight


Advertise with us

WILL decentralized cryptocurrencies such as Bitcoin be able to coexist with the raft of national digital currencies currently in development? We’ll soon find out.

Read this article for free:


Already have an account? Log in here »

To continue reading, please subscribe with this special offer:

All-Access Digital Subscription

$1.50 for 150 days*

  • Enjoy unlimited reading on
  • Read the E-Edition, our digital replica newspaper
  • Access News Break, our award-winning app
  • Play interactive puzzles

*Pay $1.50 for the first 22 weeks of your subscription. After 22 weeks, price increases to the regular rate of $19.00 per month. GST will be added to each payment. Subscription can be cancelled after the first 22 weeks.


Hey there, time traveller!
This article was published 25/04/2022 (225 days ago), so information in it may no longer be current.

WILL decentralized cryptocurrencies such as Bitcoin be able to coexist with the raft of national digital currencies currently in development? We’ll soon find out.

Canada is among 16 countries creating their own central bank-issued digital currencies, with 15 others piloting projects and nine countries having already launched theirs. The Liberal government’s 2022 budget also pledges to review legislation around risk mitigation and possible oversight of cryptocurrency within Canada’s financial ecosystem.

Meanwhile, despite its wild fluctuations in value and terrible environmental impact, cryptocurrency — digital money that can be bought, used and traded anonymously online without being routed through a institutional authority such as a bank or government agency — has gone firmly mainstream over the past two years.

Former Bank of Canada governor Stephen Poloz once described Bitcoin as “closer to gambling than investing,” but cryptocurrencies do have benefits.

They can indeed be a profitable investment — if one has the stomach for perpetual price volatility. They are also an effective means of financial inclusion for the unbanked, and are cheaper and faster to use for money transfers than banks or wire services.

According to the latest Global Crypto Adoption Index, cryptocurrency ownership jumped 880 per cent in 2021 — and 2,300 per cent since 2019 — largely owing to peer-to-peer trading platforms taking off in developing countries. By the middle of last year, there were an estimated 300 million crypto owners globally, the equivalent of one in 27 people worldwide.

The total market consists of more than 18,000 unique digital coins or tokens, and is now worth over US$2.1 trillion, eclipsing the GDP of all but seven of the world’s largest economies.

Much of this stems from how amateur investors flocked to digital assets during the pandemic to make money amid layoffs and lockdowns. Big banks are now belatedly pouring billions of dollars into digital assets and blockchain technology, which powers the verification and transaction of cryptocurrencies, out of fear of missing out on the digital money space.

Political and economic crises have likewise bolstered the adoption of cryptocurrencies.

Russia’s criminal war in Ukraine has triggered a rush on crypto in both countries. For Ukrainians, cryptocurrency exchanges enable residents to skirt emergency capital control measures such as cash withdrawal limits from ATMs, and serve as a streamlined donation mechanism to fund the country’s war effort.

In Russia, cryptocurrencies have helped some companies to evade sanctions and citizens to move money internationally after Russian banks were cut off from much of the SWIFT global financial system in early March.

Elsewhere, cryptocurrencies are a lifeline for Afghans who are witnessing their national economy disintegrate as a result of severe drought, U.S. sanctions and the Taliban’s disastrous rule. A similar situation has played out for several years in Venezuela.

In Turkey, citizens are using crypto to shelter their savings from President Recep Tayyip Erdogan’s eccentric belief that slashing interest rates keeps inflation at bay — despite his policies having the opposite effect.

In a crisis of a different sort, cryptocurrency donations helped sustain the so-called freedom convoy’s occupation of downtown Ottawa earlier this year. Protest organizers claimed at least US$500,000 in donations flowed their way after banks froze protesters’ accounts and crowdfunding platform GoFundMe withheld US$10 million in donations, citing the group’s violation of the company’s terms of service around promoting violence and harassment.

Conservative MP and party leadership candidate Pierre Poilievre, who backed the convoy protests, is an outspoken populist advocate of cryptocurrencies, saying he wants to turn Canada into a global “crypto capital” to “take control of money away from politicians and bankers and give it back to the people.”

Such comments reflect the type of anti-establishment techno-utopianism that motivates the most ardent cryptocurrency evangelists. But this cohort’s ultimate visions are increasingly colliding with reality.

State seizure efforts targeting cryptocurrencies are becoming more sophisticated. And in the words of one expert, the powerful display of co-ordinated international sanctions against Russia has been a massive setback for the “anarchic fantasy of stateless money, controlled by no central authority,” which for some ties into broader dreams of eroding the U.S. dollar’s hegemony.

Cryptocurrencies have benefitted from added exposure related to numerous crises around the world — exposure that is also bringing greater scrutiny of crypto’s long-term viability.

Kyle Hiebert is a Winnipeg-based researcher and analyst, and former deputy editor of the Africa Conflict Monitor.

Report Error Submit a Tip


Advertise With Us