Larry Fink, CEO of investment management firm BlackRock, said Thursday about a possible increase in cryptocurrency adoption due to the Russia-Ukraine war.
The war prompted the shift of foreign transaction settlement from banks and forex settlement companies to cryptocurrencies.
BlackRock CEO Larry Fink believes that digital currencies, such as bitcoin and other cryptocurrencies, can be used as a tool for settling international transactions, as we witnessed during the Russia-Ukrainian war, Reuters reported on March 24.
In a letter to BlackRock shareholders, Fink told BlackRock that the war would force countries to rethink their reliance on fiat currencies and adopt cryptocurrencies as an alternative.
With increasing customer interest in cryptocurrencies and stablecoins, BlackRock is also studying their usefulness.
Additionally, Fink believes that a well-designed payment system based on cryptocurrencies will improve the existing system for settling international transactions, adding:
A carefully designed global digital payment system can enhance the settlement of international transactions while reducing the risks of money laundering and corruption.
In response to the Russian invasion of Ukraine, BlackRock has halted purchases of any Russian securities in its active index portfolio, preventing capital flows into Russia and investments in Russia.
According to BlackRock, its clients' total exposure to Russia has fallen from $18 billion to less than $1 billion amid war, Western sanctions and the shutdown of the Russian stock market.
Increased adoption of cryptocurrencies during the Russian-Ukrainian war:
The Russian-Ukrainian conflict has disrupted the global supply chain, high inflation has prompted many countries to tighten monetary policies, and energy and oil prices have risen.
At the same time, adoption of cryptocurrencies accelerated as cryptocurrency prices rose, with Bitcoin moving and touching the $43,500 level.
Cryptocurrencies like Bitcoin are an inflation hedge and a store of value.
The increased adoption of cryptocurrencies has led to the settlement of foreign transactions in cryptocurrency as Russia has used digital currencies to evade sanctions and Ukraine has expanded its efforts to solicit cryptocurrency donations for military and humanitarian aid.
