Modern Warfare: What is Payments’ Role in Conflict?

One month after the start of the Russian war against the Ukraine in 2022, the Ukrainian government took an unusual decision for a country at war with one of the world’s most powerful militaries – they legalised the cryptocurrency industry. While in other parts of the world crypto is associated with anything from utopian visions of a post-banking world to funding crime and being the locus of tawdry financial scams, in Ukraine crypto was a vital part of the war effort. An estimated $212 million has been sent to the country so far, most of it via Tether, Ether and Bitcoin. 

More conventional payments systems are still thriving. Cashless payments accounted for 64.5% of transactions in the country, and although cash use is still prevalent this figure is growing. Even with the war still progressing and a significant part of the country under foreign occupation, the payments industry is still on par with the rest of the developed world. 

 Clearly, war can erupt anywhere. Modern, developed economies can find themselves on the frontlines, and major economic hubs like Taiwan, Hong Kong and the Middle East could also find themselves in a similar situation. If that happens then the payment systems that their citizens rely on and those that link to the rest of the world could become targets, and this is something that payments companies need to reckon with. 

Payments During Times of Conflict 

The world doesn’t stop when a conflict or war starts. Today’s conflicts are mostly fought by relatively small, professional armies or equally small insurgent groups, so while previous generations would have had to dig for victory or save scraps of metal and paper, today many civilians can continue their lives with some level of normality. Payments are a major part of this. 

As trade wars and political instability create chaos, payments systems can be a stabilising force. Ensuring accessibility, reliability, and inclusion — even under extreme pressure — is essential. Civilians depend on payments to survive; governments depend on them to maintain order and economies depend on them to prevent collapse. 

However, the industry must also face uncomfortable ethical complexities. Shutting down access can stop bad actors but risks humanitarian catastrophe. Keeping systems open can aid civilians but risk inadvertently supporting illegal activities like money laundering, which in turn can fund further violence and instability. 

This is why regulation is no longer a purely national issue. Global standards for payments, including strong anti-money laundering (AML) and know-your-customer (KYC) frameworks, are essential. They create stability, prevent financial systems from being hijacked by illicit networks, and protect the reputations of companies that might otherwise be dragged into conflict. Money laundering in conflict zones is a growing problem, and no company wants to be associated with it. 

Stable, regulated, and resilient payments systems offer more than convenience: they are a crucial pillar of security in a volatile world. 

The Payments Industry’s Responsibilities 

 We need to build systems that are resilient, not just to warfare but any of the potential disruptions that can happen. What this means is twofold: firstly, resilience should be a major concern for any payments company, and discussions about resilience need to factor in the possibility of cyber-warfare. Companies need to ask themselves if they have customers, offices or critical infrastructure in countries that are likely to be involved in conflicts, and what they need to do to ensure uninterrupted services to those countries in the case that they are involved in a conflict.  

This may mean embracing cryptocurrency, something that mainstream payments companies have been hesitant to do for decades. Cryptocurrency is resilient in ways that traditional payments simply aren’t, and although it has its downsides when it comes to being able to replace card and cash payments, it is still widely used in conflict zones the world over.  

This isn’t always a good thing – crypto can also be used to fund bad actors to bypass conventional payments systems that they have been excluded from. The fact that crypto can be used for both good and ill means that the payments industry can’t just adopt the ‘wild west’ attitude that the crypto industry was founded on. There needs to be real oversight and regulation, especially when stablecoins that can easily be used as an on-ramp and off-ramp from conventional finance into crypto are concerned. 

The term ‘payments’ shouldn’t just mean the ability to pay with debit and credit cards. These and cash should be the bare minimum, but there are far more payment options available, and during an emergency situation the focus should be on giving people more options, not less. It may be that individuals don’t have access to their debit and credit cards but do have their phones, so being able to pay via systems like Apple Pay or Google Pay could be essential for some people. While there has been a lot of negative press attention on people using Buy Now Pay Later for groceries, in an emergency situation this could literally be life or death for marginalised people, so keeping it online is vital. 

Payments are powerful, and we all know what comes with great power. Despite this, they can only thrive in stability. Involvement in armed conflict is not something we signed up for when joining the payments industry, but as the world becomes more complex, we need to start considering that what we do can harm, as well as help.