Ukraine’s Plan for Bitcoin Adoption

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Just a few days ago, on September 8, 2021, the Ukrainian Parliament passed a law legalizing and regulating Bitcoin in the country. The bill, drafted in 2020, was passed with the support of 276 lawmakers. Only six lawmakers voted against.

Ukraine could presumably be a natural fit for Bitcoin adoption, as the population would be dissatisfied with its current monetary system, which emerged when hryvnia fiat currency replaced karbovanets in a financial overhaul that took place there. 25 years ago this week.

Ukraine has a very diverse energy mix that could attract global Bitcoin miners. The country is heavily dependent on nuclear energy. Ukraine currently has 15 nuclear reactors generating around half of its electricity.

Nuclear reactors are a great source of energy that can be harnessed by mining Bitcoin away from cities. If Ukraine were to expand its nuclear facilities, it would not need to build additional electrical infrastructure to transport this energy to its residents, it could simply mine bitcoin with the energy produced instead. The state could then recover or sell the Bitcoin to supplement its GDP.

Nuclear power could be one of the most lucrative bitcoin mining strategies for Ukraine. The country currently receives most of its nuclear services and nuclear fuel from Russia, but it is reducing this dependence by purchasing fuel from the American Westinghouse Electric Company.

Increased dependence on various sources of nuclear fuel, coupled with a nation-state strategy for Bitcoin mining, could lessen Russia’s dominant influence on the country.

Ukrainian President Volodymyr Zelensky is similar to Salvadoran Nayib Bukele in that both are leaders of young populations who have a strong desire for change.

It is still not clear if and to what extent the Bukele and Zelensky have been in discussions with each other.

A plausible way forward for Ukraine is to legalize bitcoin as legal tender as soon as possible and use it with fiat hryvnia together while mining Bitcoin with nuclear power to build cash with Bitcoin in reserve. Over time, the nation could rely on Bitcoin exclusively as the dominant currency.

Last week, President Zelensky officially announced Ukraine’s arrival on the global Bitcoin scene in San Francisco, City AM reported.

President Zelensky said: “Our meeting here in Silicon Valley is a great opportunity to discuss prospects for IT sector development and innovations in Ukraine.

He continued, “Our country is transforming and adopting innovations rapidly. Over the past year, we have managed to make a real breakthrough in the digital sphere.

Last week, El Salvador became the first country in the world to make Bitcoin legal tender. The world is watching this experience, and Bitcoiners are eager to see which country will be the next to adopt Bitcoin as nations are forced to compete or be left behind.

The Prisoner’s Dilemma of Global Bitcoin Adoption

Last week, Edward Snowden urged nations to embrace Bitcoin. After El Salvador made Bitcoin legal tender, the game theory prisoner’s dilemma regarding the nation’s adoption of Bitcoin began to play out in global geopolitics. Famous whistleblower Edward Snowden has pointed out that Bitcoin favors those who adopt it early, putting pressure on other nations, who will be penalized for falling behind.

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