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]
Conclusion
§
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
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