As opposed to fiat currencies and traditional financial systems, cryptocurrencies are considered unstoppable by central entities. And they are very much proving their effectiveness in the war-struck Ukraine.
It has been a month since Russia began invading Ukraine. An escalation of the 8-year long Russo-Ukrainian war, the ongoing invasion is Europe’s largest military assault since World War II. It has resulted in over 2,300 recorded civilian casualties and 3.6 million refugees.
The loss of lives and tragic suffering of the people is further exacerbated by the continued bombings within major cities of Ukraine. The country suffers a significant infrastructural loss valued at over $100 billion, with the number rising daily. Nearly half of the businesses operating in Ukraine have ceased operations. Further, over 90% of Ukrainian citizens risk falling into poverty and turn vulnerable due to the crisis. Currently, it is estimated that at least $250 million will be required in donations to protect 2.6 million citizens from partial income loss.
This has resulted in one of the worst humanitarian crises in recent times and has highlighted the shortcomings of fiat currency to absorb economic shock. Due to this, there has been a severe shortage of liquidity to fund the military and defense operations of Ukraine as well.
The Rise Of Crypto: Saving Grace For Ukrainian Military Operations
While aid from NGOs and other countries has been incredibly helpful, Ukraine has been relying on cryptocurrencies to fund various operations, both military and humanitarian. Alex Bornyakov, the deputy minister at the Ministry of Digital Transformation, claims that the Ukrainian president shares the idea that crypto can be revolutionary for the war-ravaged country’s economy.
Due to the recent outpour of crypto donations, Ukraine has passed a law to create a legal framework for the crypto industry in the country. Volodymyr Zelenskyy’s approval of the bill emphasizes the critical role played by crypto in the ongoing invasion. Banks in Ukraine can now open accounts for crypto companies, while foreign and local crypto exchanges can now operate legally.
How Is Ukraine Raising Funds
Donations in cryptocurrencies and virtual assets to Ukraine have seen a stark rise and have been vital in continuing the fight against Russia.
A Ukrainian Flag in the form of Non-fungible tokens (NFTs) has fetched $6.5 million in Ether, the second most popular cryptocurrency next to Bitcoin. Further, the eminent crypto exchange Binance has donated $10 million to Ukraine’s cause.
FTX, a Bahamas-based crypto exchange has announced that it will give $25 to each Ukrainian on its platform. Crypto DEX TRON DAO has also donated $200,000 to help the humanitarian crisis.
Moreover, the crypto trading platform, Cryptology has announced that it will make a one-time donation of $25 USDT to every account registered in Ukraine. The aid from the cryptology team follows the international humanitarian conventions and no other organization will be involved in the program.
Crypto donations for Ukraine touched a record high of $120 million in March 2022 with more funds flowing in support of the country. Corporates, crypto startup founders, and individuals have donated generously in the form of Bitcoin, Ether, and valuable NFT collections such as Cryptopunks. Unchain Ukraine, a global crypto-native fundraising campaign has also been raising millions of crypto donations for Ukraine.
These funds have enabled the Ukrainian government to support the Armed Forces of Ukraine. Reports suggest that $15 million have been spent already in securing military supplies including bulletproof vests. These digital assets have emerged as an alternative to the traditional banking system that has become severely restricted since the inception of the war. Indeed, crypto has become a saving grace for Ukrainian citizens and the Government.