No relation to the war, but a nice photo from Ukraine. Photo by Denis Bondariev via flickr.com . License: Creative Commons
Ukraine has received more than $100 million through crypto donations. Alex Bornyakov, Deputy Digital Minister, now praises cryptocurrencies as an “essential means of defending Ukraine”.
Alex Bornyakov is Deputy Minister for Digital Transformation in Ukraine – and officially a supporter of Bitcoin, Ethereum and other cryptocurrencies. He underlines this with this tweet:
Despite the “bear market” crypto has become an essential tool of Ukraine’s defence, providing flexibility and speed that literally saved our soldiers’ lives. Every “crypto winter” leads to a “crypto spring”, but the industry is here to stay. https://t.co/Zhu93vso5T
– Alex Bornyakov (@abornyakov) July 26, 2022
Despite the “bear market”, cryptocurrencies have become an essential means of Ukrainian defense, literally saving the lives of soldiers through flexibility and speed. Every “crypto winter” is followed by a “crypto spring”; the industry is here to stay.
Bornyakov refers to an article in the Kyiv Independent of July 25, which reports in detail about the crypto donations. This article is enormously interesting because it at least gives an indication of how cryptocurrencies work in “real life” – if you like to call a war that way.
$125 Million for 45 organizations
Since the beginning of the Russian invasion, Ukrainian charities have raised more than $125 million in cryptocurrencies. The Kyiv Independent cites Crystal Blockchain, a blockchain analyst, for this figure. However, his last investigation on the subject is from the end of May. In addition to direct donations, another $ 1.2 million will come from the sale of NFTs.
According to Crystal Blockchain, 45 verified organizations are receiving donations in cryptocurrencies. For example, the government itself, the Ministry of Health, the Return Alive Foundation, the Cyberpolice of Ukraine, Binance and many others collect. As a rule, the coins are exchanged and used for weapons, ammunition or other military equipment, such as radios, first aid kits or bulletproof vests.
Especially in the first weeks of the war, cryptocurrencies were helpful. They had made it possible to pay for foreign supplies of weapons and equipment, while the Central Bank of Ukraine had limited incoming and outgoing payments. “Thanks to the crypto donations, we were able to quickly buy equipment and send it to the front,” explains Bornyakov.
The Bear Market and NFTs
Of course, the organizations suffer from the strong volatility. The majority of the donations were received in the spring; their value has roughly halved since then.
However, most organizations are only slightly affected by this. As a rule, they try to spend the money again quickly, or they change the cryptocurrencies to stablecoins. For example, the government’s official wallet has received almost 600 Bitcoins, but currently holds less than 0.05.
However, there are also exceptions: the cyber policy of Ukraine still has a good Bitcoin in its wallet, the Return Back Alive Foundation even has 127. But this is probably only an option for a few organizations. For most, stablecoins serve as efficient tools to hedge against volatility.
But charities are suffering more from the fact that the flow of donations is slowly drying up. According to Bornyakov, they enter much less often than at the beginning of the war. It is difficult to revive the flows, as the global crypto market has collapsed and war fatigue is setting in.
The government of Ukraine is trying to remedy this by selling NFTs for cryptocurrencies. The proceeds are intended to finance military equipment and humanitarian aid, and help rebuild museums, theaters and other cultural institutions. “We are using the latest technologies to bring Ukraine closer to victory,” wrote Boryakov’s boss, Ukrainian Digital Minister Mykhailo Fedorov on Telegram.
True, NFTs are even more volatile than cryptocurrencies, and the volume of this market is falling even more rapidly than that of the rest. Nevertheless, the digital museum “Meta History”, for example, which sells NFTs on the Ukraine war, is optimistic about obtaining helpful financial resources. It issued one or more NFTs for the first 36 days of the war, each of which commemorates certain events and costs 0.15 ether each.
Even before that, the “Avatars for Ukraine” had caught up with NFTs almost 13 ethers – a relatively small amount, but which, according to the Independent, also helped to buy medical materials.