The use of crypto for donations and purchases is not a new concept. However, the ongoing conflict between Ukraine and Russia has given the advantage of using digital currency for military aid.
When Russia began its invasion of Ukraine in February 2022, the Ukrainian government turned to social media to ask for donations in bitcoin, ethereum, stablecoin and other types of cryptocurrencies.
The response was overwhelming, with more than 100,000 people donating to help Ukraine’s military efforts.
Image: FXVNPro
The use of cryptocurrencies for military aid is not limited to donations. According to Alex Bornyakov, Ukraine’s deputy digital minister, the country has used crypto to buy essential items such as helmets, bulletproof vests, optical sights and other combat equipment.
According to Bornyakov, about 60% of military hardware providers can accept crypto, which proves to be very profitable on the part of the government as the conflict continues to develop.
Crypto Plays Important Role During Crisis
The Ukrainian capital Kyiv is in a position to benefit from the expansion of the crypto network since the invasion broke out. A market research company placed Ukraine at number 4 worldwide for cryptocurrency adoption last year.
Ukraine officially recognizes cryptocurrencies in September 2021.
Image: Money
One of the advantages of using digital currency for these purchases is the speed with which they can be completed. The digital minister explained that the traditional financial system will take too long, and the Ukrainian military needs immediate help. However, with crypto, purchases can be made quickly and efficiently.
When international donations began to spread – almost $ 55 million in one week back in March – the Ukrainian government quickly realized that crypto donations are the fastest and fastest way to handle the flow of money.
Also, Binance, the world’s largest cryptocurrency exchange, has launched the “Ukraine Emergency Relief Fund,” a crypto-first crowdfunding site that accepts crypto donations easily. He gave the Ukrainian government $10 million in addition to this.
Crypto: A faster and better solution
Another advantage of using crypto for military purchases is the decentralized nature of cryptocurrency payments. Unlike traditional financial systems that require intermediaries like banks and payment processors, crypto payments can be completed quickly and without delays.
Bornyakov said:
“We can secure the purchase of essential goods quickly through crypto, and what is surprising is that about 60% of suppliers can accept crypto, I did not expect this.”
The transparent nature of blockchain technology also allows the Ukrainian government to see where the donations come from, and they claim that some come from Russia who want to support Ukraine’s defense efforts.
Image: The Harriman Institute - Columbia University
Ukraine’s success in using cryptocurrency for military aid is unknown. In fact, the country has created a Crypto Fund Assistance Initiative For Ukraine.
CFAK is supported by Ukraine-based crypto platform Kuna and blockchain company Everstake, and supported by the Ministry of Digital Transformation of Ukraine.
CFAK has been a great success, with one-third of the amount donated through the initiative. Bornyakov praised the effort, not only for the amount of money collected but also for the efficiency and speed of access to funds through crypto.
According to Bornyakov, who is also the government’s de facto crypto spokesperson, Ukraine has received about $100 million in cryptocurrency donations.
The official stated in a recent online emergency briefing that more than $60 million of the $100 million was kept in the main fund managed by the Ukrainian cryptocurrency exchange Kuna.
Crypto total market cap at $1 trillion on the weekend chart | Chart: TradingView.com
The conflict between Ukraine and Russia is still ongoing, and the use of cryptocurrencies for military aid will continue.
While crypto may not be a complete solution to the challenges facing Ukraine, it has proven to be an effective tool in providing critical support to the country’s military efforts.
As the use of cryptocurrencies continues to grow and develop, it will be interesting to see how they are used in other areas of conflict and crisis.
-Featured image from the New Statesman