The ongoing Russia-Ukraine conflict has seen cryptocurrency take centre stage, proving its relevance and usecase in charity.
Research firm Elliptic has revealed that over $17 million has been donated to Ukraine’s defence effort since Russia’s military assault last week. Shortly after the invasion, the Ukrainian government posted a tweet soliciting support for its defence effort. The government said it was accepting donations in Bitcoin, Ethereum and USDT with relevant addresses provided.
In the intervening period, the addresses mentioned in the tweet have received donations worth over $17 million across more than 15,000 transactions. This includes a single transaction worth $1.8 million made from the sale of an NFT initially meant to raise funds for Julian Assange. In addition to this, millions of dollars in digital money have been contributed to non-governmental organizations supporting Ukraine’s military.
Crypto Proves Its Usefulness
The ongoing crowdfunding effort has again turned the spotlight on Bitcoin, showcasing its usefulness and importance globally. Traditionally, donations like this are made using traditional banks, but crypto has proven helpful with electronic cash transfers suspended by the Central bank of Ukraine.
Several Decentralised Autonomous organisations (DAOs) have sprung up as the entire crypto community rallies behind Ukraine. Pussy Riot, a Russian punk music band, created a DAO called UkraineDAO to use “the power of web3 tech to receive donations towards Ukraine’s effort. Their efforts have been amplified by Ethereum’s co-founder Vitalik Buterin who was encouraged by Tron’s founder Justin Sun to support fundraising efforts. Several other groups have announced plans to generate funds through different strategies, including NFT auctions and independent sales pledges.
Aside from donations, the wider crypto community have continued to side with Ukraine and its citizens. Sam Bankman-Fried, CEO of FTX, had stated on Twitter that each Ukrainian with an account on the exchange would receive $25. Tomicah TIllemann, the global policy chief for Katie Haun’s new crypto fund, also praised the use of Bitcoin to defend free and open cities.
Not to be left out, Changpeng Zhao, the CEO of Binance, who recently addressed outrage among the Nigerian community, highlighted the importance of crypto. His company further announced a donation of $10 million and the launch of the Ukraine Emergency Relief Fund to provide emergency relief through crypto crowdfunding.
Ironically, with Bitcoin proving useful to Ukraine, there are suspicions that Russia may depend on it to escape the sanctions imposed. Reports have emerged that Russian Billionaires may theoretically purchase services with cryptocurrency and continue to invest in other countries. This fear has led to calls for crypto exchanges to ban accounts with Russian links on their platforms. Ukrainian Minister of Digital Transformation Mykhailo Fedorov tweeted,
Ukraine A Crypto Country
The effort to support Ukraine from the crypto community has been made accessible due to the east European country’s support for digital assets. Unlike other countries looking to make Bitcoin a legal tender like El Salvador, Ukraine made legislation backing Bitcoin and other crypto assets in 2021.
Subsequently, the tech-savvy country has increased crypto adoption and ranks fourth on Chainalysis’s global crypto adoption index. It also sees about $8 billion worth of cryptocurrencies annually.
Before the Russian invasion, Ukraine had planned to open the bitcoin market to businesses and investors. Top state officials had promoted their crypto credentials to Silicon Valley investors and venture capital funds. However, the Russian incursion has diverted attention away from these efforts.
Overall, the crisis hand crowdfunding effort has showcased the usefulness of crypto to serve as an alternative financial instrument. This may see countries make regulations favouring digital assets to ensure they are not caught unaware by uncertainties that may arise. Without a doubt, this would increase bullish sentiments across the broader crypto community.
Do you think more countries will make legislation favouring Bitcoin after its use for crowdfunding for Ukraine? Let us know your thoughts in the comments below.
Chris is a crypto enthusiast and a firm believer in the blockchain’s ability to create a new financial paradigm. Through writing, Chris hopes to expose the intricacies of this disruptive technology and how it is beneficial to Africans and developing countries. He aims to give readers a rational and unbiased outlook of the industry by equipping them with the necessary information to make enlightened investment decisions.
