“Premium” Applied on Tether and USD Coin As Ukrainians Go Full Crypto

Key Insights:

• Tether (TUSD) and USD Coin (USDC) alone make up for 44% of the entire traded volume on Kuna
• The immense demand for these stablecoins has resulted in a premium, which citizens are opting to pay for
• As Russia further advances in Ukraine, citizens are finding solace in holding their money in crypto over Hryvnia

The ongoing war between Russia and Ukraine, which has resulted in the death of over 137 Ukrainians so far, has had a much more significant impact beyond politics.

The tremors of war impacted the global economy; however, crypto is turning into Ukrainians’ savior in these trying times.

Tether and USD Coin Only

As the situation gets worse in the country and the possibilities of defeat rise, the citizens of Ukraine have begun protecting their assets.

The country’s cryptocurrency exchange Kuna has witnessed an explosive rise in trading volumes over the last 48 hours.

Rising to almost $5 million, it seems like people are saving their money from Russian subjugation by putting it into crypto. Although not in every crypto but two – Tether (USDT) and USD Coin (USDC).

Their demand has risen to the extent that people are even willing to pay a premium on these coins to buy them. A premium on an asset usually occurs when the demand for the asset exceeds its supply.

Stablecoins are usually pegged 1:1 to either a fiat currency or a cryptocurrency. And regardless of the market fluctuations, these assets maintain their price.

Both Tether and USD Coin are pegged to USD at $1 for 1 USDT or 1 USDC. But right now, given their demand is rising, their prices are adjusting accordingly to justify the supply.

In the case of Ukraine, people have been paying as much as $0.11 premium on Tether and $0.08 on USDC.

USDT alone accounts for about 67.8% of the entire trading volume in the last 24 hours. Even though there is a higher preference for USDT than USDC, Bitcoin has minimal demand.

The increased inquiries also back this increased demand for the two stablecoins in the country.

This means that people are genuinely only doing this to protect their money. The market’s volatility would have resulted in the loss of their money had they put it in some other cryptocurrency.

The Situation of the War

As Russia continues its invasion, President Putin is being pressured by the world to take a step back and think diplomatically.

And while he did agree to talk earlier today, the chances of a diplomatic resolution seem bleak. Instead, the Russian president intends on toppling the Ukrainian government, whom he referred to as “terrorists.”

For the same, he has even called upon the Ukrainian army to do it “to take power in their hands” and overthrow the government.

On the other hand, the Ukrainian government has mandated every 18 – 60-year-old man to sign up and fight.

As the war continues to worsen, no one can predict what could happen next.