Crypto undermining power of the West to cripple economies through sanctions – Ukraine-Russia war shows

Leonard Sengere Avatar
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Cryptocurrency has had quite the journey in its young life. The most famous one, Bitcoin, was introduced in 2009 with a value of zero. Over the years that price has risen and fallen in dramatic fashion and as I write this it sits at just over $43,000. 

That would be an infinite percentage increase but we can’t divide by zero. So, if we work with the $0.09 price it had in 2010, we find an over 47 million percent increase in price. One doesn’t have to be a hedge fund manager to know that such a return on ‘investment’ in just 12 years is unheard of. 

The path to that $43,000 valuation was not smooth though. In fact that price is just about the most volatile thing we have ever seen. You can see 2000% increases in a few months and observe the price slashed in half almost overnight. As a result, Bitcoin has always had its detractors despite the long term trend being an increase but who can blame them.

Cryptocurrencies’ main draw 

People can speculate on Bitcoin’s price all they want but its main draw is not the 47 million percent price increase since launch. The main draw to Bitcoin and other cryptocurrencies is the lack of government control. 

Here in Zimbabwe we don’t need reminding how govt policy can wreck a currency and so it’s no wonder Zimbabweans have been interested in cryptocurrency since the beginning. There is transparency in the minting of cryptocurrency and everyone knows how many there are at any given time and that there will only ever be 21 million coins in Bitcoin’s case. 

So, we know the supply side will be kept in check but there’s more. That lack of govt control means the cryptocurrencies are truly global currencies. As a result, it doesn’t matter where you reside on planet earth, if you can access the internet, you can participate. The same bitcoin traded by the Yakuza in Japan and the North Korean hackers is the same that you and Queen Elizabeth use. There are no geographical limitations.

Compare that to the USD and forex situation in Zimbabwe. There is a perennial shortage and Zimbabweans always find it hard to participate on the global market. Even the largest companies listed on the Zimbabwe Stock Exchange are unable to purchase all the materials they need to operate from outside the country because the few forex we have is rationed by the govt. 

That’s what we get for using a United States currency. No wonder some countries have been looking at adopting bitcoin as legal tender and El Salvador actually did that last year.

Govts don’t like this

Now, we talked about our govts printing currency like there’s no tomorrow and introducing inflation. The Zimbabwean govt through the Reserve Bank has done this hence the low trust in our local currency. 

However, even the USD we look to as a saviour is similarly vulnerable. The US authorities have been printing money like we have never seen before. Now, the US economy is experiencing 40 year highs in inflation. It would have been worse if the USD was not the reserve currency of the world. A situation which has allowed the US to export out their inflation.

Without this printing, govts are not able to spend on what they call ‘essentials’. Yeah, the US govt spent $700,000 replaying Neil Armstrong’s speech on the moon to determine whether he said, “one small step for man, one giant leap for mankind” or “one step for a man, one giant leap for mankind.” Only to come up with an ‘inconclusive.’

In Zimbabwe its worse because in addition to the wasteful spending, there is the looting and the corruption. So, you can see why most govts are not at all excited about these cryptocurrencies over which they have no control. 

If governments did not have a monopoly on collecting taxes and printing money, the US government would not have spent over $800,000 to find out if Japanese quail (zviuta) are more sexually promiscous on cocaine. 

Global control

Last time we discussed how the West, the US in particular, has too much control over the internet and hence on what constitutes news. The same goes for the financial market. The West controls financial markets today and if you fall afoul of them you are in trouble. 

Russia invaded Ukraine and the West pounced heavily on them, crippling their economy. Some will feel that was warranted because of the atrocities they have committed. If you give most Zimbabweans a minute to think about it, they are forced to feel for the ordinary Russian who is opposed to this war but is caught in the crossfire. 

That Shona saying rings true, ‘panorwa nzou, nyatwa yehuswa kutsokodzerwa.’ (When elephants fight, the plight/misfortune of the grass is being trampled) [Terrible translation work there but hey, I tried]

We have been going through something similar in Zimbabwe. 


The problem with discussing the sanctions on Zimbabwe is that it descends into a pro-Zanu-anti-Zanu fight. The facts though are that, targeted or not, the sanctions on Zimbabwe have had a massive impact.

The Zimbabwe govt will tell you that Zimbabwe would be a first world country were it not for those sanctions – a massive stretch. The opposition will tell you the sanctions have had zero impact on Zimbabwe and may have actually benefited the country by limiting the movements of govt officials who were known to frequent exotic destinations. Yet another stretch, the truth lies in the middle.

Businessmen like Strive Masiyiwa will tell you that the sanctions have indeed affected their businesses. The fact is, although the sanctions are supposed to be targeted, many foreign companies are afraid to deal with Zim companies for fear of punishment by the US. As a result, Zimbabwe has over the years lost more than 60 correspondent banking relationships for example. For good reason too, as reported by The Independent:

2016: Barclays Bank Plc was fined US$2,5 million for violations of the Zimbabwe sanctions regulations

2019: Standard Chartered Bank was slapped with a US$1billion fine for violating US sanctions against Zimbabwe and other countries

There are more examples but the point is made. Sanctions are effective. If you’re still not convinced, then at least consider how the sanctions are used by Zanu PF as an excuse for the country’s woes. So, even if you don’t think the sanctions have affected Zimbabwe you should want them gone, if only to deprive Zanu of its excuse which is believed by many.

Cryptocurrencies offer escape route against sanctions

Like we talked about, Russia is under heavy sanctions which have tanked their local currency. As a result, Russians and Ukranians too have turned to good old Bitcoin. 

The cryptocurrency financial system is not under direct control of the West and they are unable to effectively influence it to punish certain people. So, these people who are leaving the fiat system and turning to crypto are essentially evading the sanctions that the West worked hard on.

Of course the West is annoyed by this. They often talk about targeted sanctions but they also believe in squeezing the average person to push them to revolt/rebel against their oppressive govts. So, the authors of the sanctions are not only concerned about the rich govt officials and oligarchs evading sanctions through crypto but also the average Russian. 

There have been pushes to get cryptocurrency exchanges to block all Russians from participating. However, the ideals of cryptocurrencies won’t let the exchanges comply with those requests. Reuters notes,

The crypto exchanges’ stance goes against that of several traditional payment companies and fintech firms that have responded to sanctions by restricting services in Russia.

On the crypto exchanges side they are adamant that they won’t comply with a blanket ban of all Russians. The largest crypto exchange, Binance, had this to say,

Crypto was meant to provide greater financial freedom for people across the globe

The Ukrainian vice prime minister directly called for the blocking of Russians from crypto exchanges. Same as he directly contacted Elon Musk asking for Starlink internet, however the crypto exchanges are not playing ball. They are sticking to the ideals on which crypto was founded.

Crypto ideals

Said Kraken CEO in response to Ukrainian VPM,

I understand the rationale for this request but, despite my deep respect for the Ukrainian people, @krakenfx cannot freeze the accounts of our Russian clients without a legal requirement to do so.

Russians should be aware that such a requirement could be imminent.

That requirement could come from your own government, as we have seen in Canada, in response to protests, bank runs and attempts to flee the country.

It could come from foreign states, like the US, as a weapon to turn the Russian populace against its government’s policies.

FWIW, I would guess that the vast majority of crypto holders on @krakenfx are anti-war. #Bitcoin is the embodiment of libertarian values, which strongly favor individualism and human rights. In Canada, crypto was the only financial rail left for those who opposed the regime.

Our mission at @krakenfx  is to bridge individual humans out of the legacy financial system and bring them in to the world of crypto, where arbitrary lines on maps no longer matter, where they don’t have to worry about being caught in broad, indiscriminate wealth confiscation.

Sometimes the hardest thing about having power is knowing when not to use it. Our mission is better served by focusing on individual needs above those of any government or political faction. The People’s Money is an exit strategy for humans, a weapon for peace, not for war.

Besides, if we were going to voluntarily freeze financial accounts of residents of countries unjustly attacking and provoking violence around the world, step 1 would be to freeze all US accounts. As a practical matter, that’s not really a viable business option for us.

Kraken CEO Jesse Powell on twitter

Those are ideals I can get behind. Other exchanges are holding firm too and Coinbase shares similar sentiments. In this game of thrones played by governments, it is the powerless citizens that suffer. For too long we have had a financial system that govts could weaponise to further their agendas. But for now, cryptos offer a lifeline.

The West is looking at ways to combat this and we could indeed see other govts copy the Canadians in clamping down on cryptos. The govts might succeed but we will be rooting for crypto all the way.


  1. Gg

    The issue though is that you can move the crypto no problem. The issue comes when you actually want forex since those platforms definitely follow KYC requirements and the bank you’ll deposit to will abide to the sanctions lest they lose access to US dollars. In fact the very statement you cited said they will cut off access if they have a legal order saying so.

    1. Mthembo

      You can get the Forex trust me, just book you a flight to Hong Kong, North Korea, China, India, el Salvador etc and you are good to go. No hassle no fussle. But they won’t even be a need since most businesses now accept crypto as a form of payment so you are good either way

  2. HM

    Forgive for side showing. How about a follow up article on solar power. Your last article was very informative and generated a lot of interest. I suggest you do a monthly update on the issue.
    And by the way how far are wifi routers in terms of coverage?
    And the developments on e=cars?
    Some of your fervent followers like me are stuck in the bundu and would love updates on some of your down to earth and very relevant articles.
    Not that this article is not informative. I am enjoying it.

  3. Kay Bright

    I’m so much interested in understanding these crypto things,, I’m a technophili

    1. Fra

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  4. Mthembo

    @Krakenfx just fired shots at the US😂😂😂

  5. Ike

    Great analysis.
    Keep up the good work.

  6. remember fundira

    very informative

  7. The Empress


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