- Bitcoin’s principle quality of being a decentralized currency makes it the ideal tool for refugees trying to preserve their life savings while crossing borders.
- All the usual wealth preservation instruments can go in vain in times of national crisis due to various reasons.
Bitcoin, or perhaps any other cryptocurrency, could be a wise choice for refugees faced with finding shelter outside their homeland. All the other traditional wealth depositions could become obsolete to some extent, when it comes to transferring values across nations.
It isn’t completely unheard of. Refugees fleeing the war-torn Ukraine are reportedly carrying their life savings in BTC. The use case of crypto assets is no longer limited to enthusiasts who would invest willingly. The world order at threat gauges the need to invest in the apparent unrealistic asset for anxious individuals, poised to turn their gaze at the blockchain.
Financial Problems Faced While Changing Residence Across Borders
The Middle Eastern refugee crisis was the start of an era of mass evacuations and the populace seeking refuge across continents. Each day marks increasing uncertainty that the world order, in multiple parts of the world, is being set toward national and international crisis situations. It could be due to plenty of reasons. Political unrest may arise due to an autocratic regime, civil war, or democide. It could be an economic crisis for failed currency, uncontrolled hyperinflation, or corrupt fiscal practices. International wars, border conflicts, anti-sovereign regimes, terrorist militancy, and nuclear threats are on the rise in several corners of the world. When forced to leave their homeland, people are going to need finances to set up a life elsewhere. The wealth that they have accumulated in their country needs to be gathered and transferred, without suffering substantial losses, to the new home. When the crisis hits, the greatest concern on one’s mind is protecting their life savings. Traditional finances become very complicated at those times as they are totally dependent on the local system.
The real estate trade is extremely hard to carry out if a mass number of people are attempting to leave the place altogether. Market demand may be heavily impacted. Apart from that, government policies may also affect the liquidity of this trade. Cash holds a risky value abroad because usually, the currency of a country depreciates in value in times of national crisis. Besides, it is very vulnerable to theft. Bank savings may be useless. Government prohibitions or mass withdrawals may make banks shut their doors and ATMs.
Similar is the case with gold, which is not divisible, incurs heavy import and export duties, and may have government restrictions to be imported and exported. Stocks and bonds are most probably going to be adversely affected due to market crises and sanctions imposed, along with bank policies closing up to prevent liquidating them.
The Case for Cryptocurrency Adoption
Along with being decentralized, crypto assets are intangible, which means that they won’t be stolen, looted, or degraded in any way. Also, transferring them does not bear additional costs like duties and tax, etc. It can be globally sent to anyone within minutes. It is free from any kind of national or extra-national sanctions. Its value is the same across the globe. It cannot become inaccessible due to events like bank holidays or institutional crises.
It can also be simply transferred to someone you trust. What’s even better is that it’s not necessary that the person must be in the country of relocation. The thing of importance here is the safety of your seed phrase and wallet during travel, the trustability of the person you transfer the fund temporarily, and the security level they undertake for the safekeeping of your funds.
Ukraine Refugees Turning to Bitcoin
Recent news broke about a 20-year-old Ukrainian refugee immigrating to Poland with $2000 worth of BTC in a USB drive. Another Ukrainian who stayed in the country to serve in the military sent crypto in a wallet to his children and wife at the border. People have also been reported to use the Lightning network to transfer money using crypto. The Ukrainian government also posted pleas on Twitter, in February 2023, for donations using crypto. It’s been tormented by Russia, who employed both military and cyber-attacks to hamper the country’s banking financial institution. As a result, until now, Ukraine has received more than $100 million worth of crypto donations from across the world.
It’s not just Ukraine, Venezuela’s economic crisis drove people to turn to BTC to prevent their life savings from being ravaged by the downfall of Bolivare. Remittances from abroad are charged a tax as high as 56%. To counter this, Venezuelans started receiving money in BTC from their relatives abroad. According to the reports of the U.N. High Commission for Refugees, Afghani refugees, Lebanese refugees in other countries, and refugees in Lebanon have carried out peer-to-peer crypto transactions due to their lack of access to financial institutions and instruments.