Just as the COVID-19 pandemic accelerated digital adoption, causing profound changes that are still manifesting themselves today, several experts hypothesize that the conflict in Ukraine will accelerate the process of de-dollarization and the adoption of alternative global financial systems. Kimberly Rosales, who has studied different financial systems, explains in detail what de-dollarization is all about in today’s global financial system.

The conflict in Ukraine is an issue that is dismaying the world and is also of concern to the “crypto” ecosystem. There are many concerns about the impact of the conflict on the behavior of crypto assets and, in particular, on the crypto industry.

“Without lucubrating too much about the possible developments triggered by the current conflict, what we can visualize is that the conflict in Ukraine is a catalyst similar to what the pandemic was,” Rosales explains. “The pandemic accelerated digital adoption causing profound changes that are still manifesting themselves.”

The use of financial means to achieve strategic objectives by the US has a long history. Although they tend to be effective in the short term because they generate very concrete damage and conditioning, their extensive use wears them down and motivates actions in their victims.

These, in the long term, seek alternatives, weakening this system and limiting its scope. “I refer to sanctions imposed through the global financial system, currently governed almost unilaterally by the US. For some thinkers, US actions constitute the death throes of an outdated imperial world economic system based on the use of force,” says Rosales.

These economic and financial actions are obviously known to all, and both the Russians and the Chinese have been working for more than a decade to try to reduce their dependence on the global financial system. Before the conflict escalated, Russia had some $630 billion of reserves in the country, the fourth largest in the world (behind China, Japan, and Switzerland). Now what is really interesting is that Russia has been de-dollarizing its reserves for more than a decade: only 16% of them are dollars, there are 20% gold, 30% yuan, and 32% euros, among other assets.

“This allows us to understand that there are different views, but what we have to understand is that the scope of the conflict is global and what we are talking about is a new world order,” Rosales assures. “What was yesterday will not be tomorrow and, just as an example, let’s look at the unusual change in US policy regarding oil imports from Venezuela.”

The use of financial means as mechanisms of financial warfare, contrary to what is thought at first glance, ends up weakening the financial system. This is where the question to ask is whether decentralized digital platforms are in a position to become the infrastructure of a new global financial system. The quick answer is no because the conditions are not yet in place for that to happen.

While decentralized infrastructure has grown enormously over the last few years, the truth is that there is still a long way to go, at least to address a challenge of the proportions we are talking about. It is one thing to create communities around NFT collections or even to create financial protocols that will only be used by the “early adopters” and quite another to create a decentralized infrastructure that supports the exchange of value of nations and supports international trade.

“What is real is that “crypto” adoption and understanding of its value proposition will be tremendously accelerated by this conflict,” the expert asserts. “In situations like the ones we are living in, governments tend to become more authoritarian and take increasingly arbitrary measures, highlighting the problems of the status quo.”

Access to financial services is a very obvious example. Millions of people in war-affected areas lost access to their assets at a time when they needed those financial resources the most. However, those who had access to “crypto” services were able to operate smoothly and alleviate the logistical complication of leaving Ukraine, for example.

On the other hand, Russians also saw their assets affected: the ruble fell, the stock market fell, they lost the possibility of accessing international payments, and even have restrictions on access to their assets in banks. The natural response to this scenario is to look for alternatives. Necessity has the face of a heretic. This search for alternatives is not only at the individual level but also at the level of organizations and even at the state level.