Russian aggression and invasion of Ukraine has brought a realignment of global affairs and changed the normal flows of political and economic activities around the world. As Putin's brutal Urainian war enters a second month with heavy Russian losses, sanctions on Russia has highlighted just how fragile globalization has been and it takes only one despotic moron to ruin it for everyone. It is as if an ongoing pandemic was not enough.
With the Russian economy cut off from foreign capital and major currencies, I had wondered if Putin will look to the black markets and even the gray areas of global trade to blunt the catastrophic effects of Western and allied sanctions on his diminishing economy. And it looks like crypto could offer him a limited lifeline.
It is clear that some nations are attempting to reap the benefits of the previous economic relationships and some are trying to claim neutrality to avoid angering Putin and continue to buy cheap oil and gas from him. Nations like India, Israel, and Turkey quickly comes to mind. In fact, it is likely that Asian nations could continue to fund Putin's war and keep him afloat.
It has become clear to me that the West particularly the United States, will exert pressure on nations to enter its camp. It may work with some over time but nations like India and Israel, semi-allies at times when their national issues align with those of the United States continue to have a pass. For Israel, it's its security while with India, it is China's growing willingness to flex its political and military powers and exert its will on others. But who can blame them? We do the same here.
I believe blocks of nations will be created and overlap with some nations participating in more than one depending on their own interests. Most of them will be only economic in nature. But if some blocks be more rigid and globilization fractures further, cryptocurrencies may the link that binds these blocks together.
Just as Russia is desperately trying to find ways to get around sanctions, these blocks will trying find ways around using the major currencies. Imagine oil, minerals, and precious metals listed on futures exchanges not against the dollar but Bitcoin or Ethereum. Further more, some blocks may decide to collectively adopt a single or basket of cryptocurrencies as their own means of trade among each other.
This is not going to good or bad for the West but it could definitely allow some unfriendly governments to escape sanctions. What this means for the global economy is difficult to say. Being an optimist, I hope that it will allow some parity between the rich and poor in these blocks if there is a stable means of trade and allow the masses a greater voice in their own governments. Isn't that what some supporters of crypto are hoping for?