3/30/2022 - Economy and Finance

The function creates the organ

By Horacio Gustavo Ammaturo

The function creates the organ

About 50 years before Darwin wrote his book The origin of the speciesJean-Baptiste Lamarck already spoke of the evolution of living beings in his work Zoological philosophy.

It stands out in his theory, a phrase:" The function creates the organ", including that the environmental environment of a species may force it to adapt by creating or weakening an organ if it is no longer necessary.

It has been almost fourteen years since the emergence of the bitcoin manifesto that served as a foundational stone for millions of people to speak and invest in this way of accumulating purchasing power that has generically denominated as a digital asset.

Values such as freedom, equality, or decentralization, common to the vast majority of historical revolutionary movements focus on this opportunity in financial transactions. As in politics, in which the revolution emerged from the people to limit the excessive powers of kings and monarchs, in this case, those who bear the dominant situation are the regulators and banks that intervene in the world economy.

So far, snobism or greed were the rules that led many investors to include this kind of assets within their balance sheets. Obviously, there are more or less crypto friendly generations, as well as market circumstances that provide the use of alternative payment means and processing systems.

However, the war between Ukraine and Russia presented a new scenario for the use of cryptocurrencies, accelerating the adaptation of transactional models.

Both parts of the conflict, for different reasons, are protagonists in the process of evolution of this species (digital assets), because the needs that the environment places leave the crypto world in the role of that organ that develops and grows.

For the first time in a long time, governments around the world agree on something: everyone plans to financially sanction Russia, even traditionally neutral countries, such as Switzerland, Norway or Finland, expressed their partiality.

The sanctions on Russia

Blocks of essential goods:The US, the United Kingdom, the EU, Japan, Australia, New Zealand and Taiwan have hit Moscow with economic sanctions.In particular, Taiwan, producer of over 90% of semiconductors banned all shipments to Russia, no country can last long without semiconductors.

Expulsion from the SWIFT system:The United States, the United Kingdom, France, Germany, Italy, Canada and the European Commission jointly agreed to expel the Russian banks from the SWIFT payment network in an "unprecedented global sanction coordination act".This means that the Russian banks have almost the ability to send or receive money outside Russia, which makes them almost useless as financial institutions.

Frozen Central Bank assets:The EU and US coalition also imposed sanctions on the Central Bank of Russia by paralyzing more than $640,000 million in Russian foreign currencies.From now on, no American person or company can commit to the Central Bank of Russia.

Fallen from the Russian ruble:Without escape paths for the rest of the financial world, the Russian ruble received a major blow. Passing from 80 rubles per USD 1 to almost 120 rubles per USD 1, marking the biggest falls in one day in the value of the currency of Moscow ever recorded. Citizens, both inside and outside Russia, try to withdraw their funds from the Russian banks.

Go up to interest rates:Given the low demand of the ruble, the Russian Central Bank rose the interest rate up to 20%, almost twice what it offered a week before the start of the occupation.

Quotation period:Even during a few wheels the Moscow Stock Exchange ceased to operate, in search of a terrible sangria in the quotation of Russian assets.

The cryptocurrencies, the organ that adapts more quickly to new realities

If we analyze the two parts of this conflict, understanding how such Russia on the one hand, and on the other, to the rest, in which it is included, obviously Ukraine can observe how the influence of the crypto world is relevant in both cases.

International aid

Dozens of decentralized organizations, or DAOs, were created to raise aid funds for Ukraine. The organizational facilities and advantages that offer this type of technological legal structures provide confidence, traceability and control over the contributions and decisions made for use.

Self-Custodia

In times of war being able to rely on money in our hands, without it representing a risk for theft or loss can mean a matter of life or death. Accessing virtual accounts via smartphones or relying on cold wallets or cryptocurrency balance support devices allow people circular between countries without relying on local banks or centralized processing systems.

Also the Russian people knew to obtain the advantages that the crypto world offers against these financial and economic movements.

Operations in bitcoins multiplied more than ten times, in terms of transactions per second, since military actions were initiated. The openings of digital accounts by Russian citizens fired, as well as purchases in the informal markets of cryptocurrencies against physical rubles.

Faced with the threat of a permanent and sustained devaluation of the Russian currency, its holders now rely on an alternative that does not require security boxes or bank accounts for their hold.

However, in the face of the sanctions imposed by the West on Russia, it is likely that those who most impel the use of alternative means of payment and processing are the Russian government itself, the companies of this origen that continue to trade with other countries and the Russian millionaires for their usual transactions.

Is it possible that after 105 years of the Bolshevik revolution, which culminated in the end of the zarist Russia, the war with Ukraine will serve as a calde of cultivation so that a new revolution will begin to end with a financial system based on centralization and discretion?

The geopolitical result of the actions of Russia and the rest of the nations is uncertain, instead, the huge step towards adaptability that proposes the crypto world is inevitable.

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horacio gustavo ammaturo

Horacio Gustavo Ammaturo

I am Gustavo Ammaturo. I have a degree in Economics. CEO and Director of infrastructure, energy and telecommunications companies. Founder and mentor of Fintech, DeFi and software development companies. Blockchain Product Designer.

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