October 1, 2022

Bitcoin’s Role In Ukraine’s War Survival

The invasion of Ukraine has left the entire world talking and acting. A lot of people are rooting for the Ukrainians and advocating for heavy economic sanctions, others are calling for an end to the war because of the ridiculous price of gas. 

One thing that is certain is that everyone has taken a hit one way or another as a result of Putin’s action.

In a bid to help Ukraine turn the tide of the war and survive, many people have made donations worth millions of dollars to the Ukrainian government in cryptocurrency – especially in Bitcoin.

But a question comes to mind. Why has the country under heavy attack turned to cryptocurrency and how has the cryptocurrency industry affected its reputation, in spite of the war?

Well, to answer this question, we need to take a step backward and actually get a few facts right. 

How Much In Bitcoin Has Been Donated Thus Far?

When things began to get a lot more severe with the crisis in Ukraine, the government decided to post 2 cryptocurrency addresses on their Twitter accounts. Donors then had complete and direct addresses to which they can send in their cryptocurrency donations.

The crypto wallets amassed a total of $10.2 million, in just four days after the invasion. Currently, more than $100 million have been raised with the “Crypto Fund For Ukraine” run by the founder of Kuna. Kuna is a Ukrainian crypto exchange and has accounted for about 70% of all donations.

Michael Chobanian, the founder of Kuna has said in a report that the country is still receiving crypto donations and also stated what exactly the funds are used for. “The received donations are being spent on aids like daily rations, bulletproof vests and helmets,” Michael said.

At first, the Ukrainian government had two funds set up. One for military support and the other for humanitarian purposes. However, after the obvious escalation of the war situation, Michael said that both funds now had to be merged. Both funds were now geared towards military support.

Bitcoin was – and currently still is – the most donated digital currency to the Ukrainian fund. Other major coins like Ethereum and Tether coins were also being donated in large amounts to the fund. 

You may now wonder: why Bitcoin? What benefit would Ukraine get from receiving donations in Bitcoin? The answer is not far-fetched.

What Are The Benefits Of Donating In Crypto?

The benefits are rather obvious. Firstly, the fiat currencies sent by the European Union and aid sent in from the U.S are very vital. However, cryptocurrency donations have created an opportunity for regular individuals to participate and get involved with world situations such as Ukraine’s.

U.S crypto charity organization, The Giving Block, in a statement to AFP, said that Cryptocurrency donations have opened the door for young citizens of the world to get involved and support various causes, thus having the feeling of fulfillment.

Another very important reason why Bitcoin donations are better for the Ukrainians is the reduced influence by geopolitical and macroeconomic factors. Michael points to the depreciation in value of the Ukrainian hryvnia as a result of heavy inflation.

Furthermore, one of the most obvious advantages of donating in Bitcoin and other digital currencies is the speed of operations. Regular bank transfers can take up to 24 hours to be validated between two countries. However, cryptocurrency transfers typically take between minutes to an hour to conclude.

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