It’s been almost a month since Russia invaded Ukraine – and politics aside, this is perhaps the first real-world demonstration of how incredibly useful cryptocurrencies can be. Through the power of decentralisation and blockchain technology, Ukraine has received over $60 million US dollar equivalent in various crypto assets; and these are being used to help Ukraine’s military.
How did this start?
On February 26 2022, 2 days after Russia invaded Ukraine, the Ukrainian government posted on Twitter a cry for help; they asked the world for cryptocurrency donations.
And then the world answered.
As of writing this article, there has been over $60 million US dollar equivalent in crypto donations from all over the world. These donations include a single transaction worth over $1.8 million, which appears to come from NFT sales. People have also donated NFTs that have previously been sold for hundreds of thousands of dollars, including a CryptoPunk NFT worth over $200,000.
How are all these donations being used?
A Ukraine-based cryptocurrency exchange, Kuna, helped the Ukrainian government setup and operate their crypto wallets. They have also helped with the sale of said cryptocurrencies to exchange them for fiat currencies, mainly the Euro. The fiat was then used to purchase military gear including bullet-proof vests, drones, petrol, heat-sensitive goggles, and this was purchased from both state actors and the private sector.
It's incredible to think that such a feat would not be possible even 10 years ago; and it’s even more incredible to simply ponder on that no single authority can ever stop these donations due to cryptocurrencies’ decentralised nature.
To further solidify their stance on cryptocurrencies, just yesterday the Ukrainian government legalised cryptocurrencies. The Ukrainian president signed into law the legislation on ‘virtual assets’.
The other side
On the other side of the coin, many exchanges are blocking Russian-IP access to their exchanges, and blocking out the masses from access their crypto (kept on their centralised wallets)*.
This has gained a lot of controversy as the purpose of crypto is to not only build a permissionless, decentralised future, but also that an average Russian citizen has nothing to do with its invasion of Ukraine. In fact, many have protested against it and still are.
A few notable exceptions to this include Binance and Kraken, who have publicly spoken out against blanket bans on ordinary Russians. Coinbase, on the other hand, issued a similar statement but followed up by banning 25,000 accounts in the ensuing days.
*[It is important to recognise that self-custodian wallets, i.e. wallets a user has the private keys to, cannot be banned as is the purpose of decentralisation]
§ Ukraine amassed over $60 million in cryptocurrency donations
§ Due to its decentralised nature, these transactions are seamless and cannot be blocked
§ Many Russian users lost access to their cryptocurrency assets from crypto exchanges
§ ‘Virtual assets now legal in Ukraine
§ Ukraine selling crypto for Euro to buy military gear