Bitcoin saving: the role of Cryptocurrencies in Ukraine
London: Cryptocurrencies have played an unprecedented role in the Ukrainian war, helping the government raise millions of dollars to fund its war against the Russian invasion.
is the crypto industry changing its reputation and impacting in the midst of war clouds?
How much is crypto up? - At the beginning of the dispute, Ukrainian officials sent the addresses of two crypto wallets to their Twitter account, giving the donors a clear and concise explanation. the address to which the donations will be sent. The funds attracted more than $ 10.2 million (9.2 million euros) in the four days since the attack.
Since then, more than $ 100 million in cryptocurrency has been collected, with the "Crypto Fund for Ukraine" managed by Michael Chobanian - founder of the Ukrainian crypto exchange Kuna - comprising 60 percent of all donations.
"We are still collecting crypto. It is used for assistance such as daily food and vests that can be fitted with bullets and hats," the 37-year-old Ukrainian woman told AFP.
Initially, two funds were set up, one for humanitarian purposes and the other for Ukrainian military support.
However, after the violence escalated throughout Ukraine, funds were mobilized and fully focused on military support, Chobanian said.
He said most of the crypto offerings come in the form of Bitcoin, Ethereum, and stablecoin Tether - a coin denominated individually in dollars.
What are the benefits of donating crypto?
Aid packages are sent to Ukraine with fiat money from the United States and small European Union cryptocurrency donations, but the following allows people to get involved.
The US charity, "Giving Block", told AFP that cryptocurrency donations have the potential to attract "small donors" who want to support a variety of causes.
Another reason that crypto donations have value in Ukraine is that they are not influenced by geopolitical or macroeconomic factors. Chobanians point to the depreciation of the Ukrainian hryvnia due to inflation.
What are the obstacles?
Despite the success of crypto in helping the Ukrainian war, it has not always been a smooth journey. In the early days of the conflict, the deputy minister for digital reform wanted to issue a Ukrainian cryptocurrency on the grounds of Kyiv, but the project was eventually canceled. To make matters worse, people have seized the opportunity to invent and sell counterfeit versions of state-owned crypto.
"There was a lack of communication" in the government, said Chobanian, who has been working closely with the department. “It was the first day of the war,” he recalls.
In addition, cryptocurrencies have become an integral part of the Ukrainian economy - used as a means of trading in cybercrime, tax evasion, and big money laundering.
According to data analytics firm Chainalysis, transactions from Eastern Europe to other regions are very high, and the company suggests that "a major plane may respond" to other crypto movements in the region. What are the consequences? - Despite the risks associated with crypto, Chobanian is confident that it will become a major part of the Ukrainian economy.
He believes that such discussions could be beneficial to the crypto industry, leading to "equitable and efficient regulatory policies". Since last week, US President Joe Biden has signed a management letter seeking further clarification and guidance on crypto regulation - reflecting Washington's determination to oppose the ever-growing and new asset class.
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