Ukraine Crowdfunds Their Defense Against Russia with Crypto
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Days before Ukraine was invaded by Russia, its parliament voted to legalize the use of cryptocurrency. Since then, the official twitter handle of Ukraine disclosed two wallet addresses asking the world to send BTC, ETH, or USDT in support of their war efforts.
After being vetted, the wallets have since garnered over $15.4 million, as per reports from Elliptic. Other organizations like the Ukrainian NGO Come Back Alive, that support the military with equipment and training, have also turned to crowdfunding and received over $5 million. The last minute legalization of crypto by Ukraine’s parliament was both timely and a strong indicator in the role the currency and blockchain technology would play in times of conflict.
Despite security and firewall measures, centralized institutions remain vulnerable to cyberattacks. In the week prior to the war, multiple banks and government sites were temporarily shut down. This was among the first indicators that invasion was imminent.
Following the first wave of attacks and declaration of martial law, the Central Bank imposed restrictions on withdrawals, trades, e-money transfers, and fixed exchange rates as means to keep stability in the economy. Many citizens were and remain blocked from their assets in traditional financial institutions and limited in their capabilities to flee the country or secure supplies. Through crypto networks, a signal and cellphone can enable transactions. It has since become a lifeline for many Ukrainians.
According to the New York Times, cryptocurrency was already traded in Ukraine more often daily than the native fiat currency. After the wave of Central Bank restrictions, trade volume on the Ukrainian crypto exchange Kuna rose by 220%, as reported by Ethereum World News.
Since then it has retreated to 170%, but not without further proving why a decentralized system is helpful when traditional institutions and avenues of securing funds are either too slow or compromised.