War is a harsh reality that stems from socio-political and economic matters. As much as the world wants to avoid it, conflicts do arise and happen. We have seen countless wars and they have been occurring since early civilizations. The ruthless acts of asserting power and authority over another ethnicity, culture or ideology makes it a terrible means to an end. It is also during these conflicts that money becomes scarce, as banks shutdown and production ceases.
This is where cryptocurrency can offer much needed relief. Due to its decentralized nature, it cannot be controlled or censored by government. It can benefit those in need by providing much needed aid. Cryptocurrency can move money across borders, without restriction during times of crisis. Donations from cryptocurrency are then converted to much needed fiat to provide humanitarian aid (e.g. food, clothing, shelter).
Through social media via Twitter, the Ukrainian government account has tweeted a message about accepting donations in the form of cryptocurrency. Times like these can also be when bad actors can take advantage of the situation. We have to proceed with caution to verify that it is indeed a legitimate Twitter account.
There have been endorsements from other people, starting with Ukraine’s Vice Prime Minister and Minister of Digital Transformation Mykhailo Fedorov.
“Stand with the people of Ukraine. Now accepting cryptocurrency donations,” Fedorov wrote on Twitter.
The good thing about crypto is the transparency. You can look up the wallet address on Etherscan (a blockchain explorer) and see for yourself how much has been collected and how many transactions there are to this account. These donations are in the form of ETH (Ether), the native currency of the Ethereum blockchain.
Does crypto really help bring aid to the needy?
This is a question that should be asked. You can send donations in the form of fiat, not crypto. Why would it make crypto necessary in times like these?
Since crypto is decentralized, it uses a different network from traditional finance. It does not use wire transfer messaging services or require the SWIFT network. Traditional finance rails take longer due to clearing and settlement of accounts. Crypto uses an instant settlement payment network where one user (the donor) can send money directly to the beneficiary (Ukraine cryptocurrency wallet). Once the beneficiary has the crypto donation, they can convert it to fiat (local currency) to purchase aid.
Now it would be even more tragic if these fundraising campaigns are taking advantage of an already bad situation. It is not clear how the money is being converted and how it is being spent. Since then, there have also been other fundraising efforts that ask for cryptocurrency to aid Ukraine. A NYT report states that Ukraine has received $22 Million from donations in cryptocurrency.
Crypto Is Neutral
What we need to understand is that crypto is neutral, and not meant to favor anyone. Even in conflicts, crypto cannot be influenced by any central authority. If Ukraine can use it, so can everyone else. It is like the air we breathe or the water we drink. It is made available to all, irregardless of your background. It cannot be stopped because it is a decentralized payments network, that will process a transaction that is censorship resistant and tamper proof.
In times of conflict, it is also a way for people to move their money. If banks are closed and there is no currency available, crypto can help the displaced to safely and securely move their wealth and collect it from another country. Unfortunately, if people do not have the means to purchase crypto during a conflict it will be much more difficult to do. It is much easier for those who already have crypto.
The only way to stop cryptocurrency is at the digital exchanges like Binance and Coinbase, where the custodial accounts can be frozen upon government request. If the cryptocurrency wallet is personal, it cannot be frozen or suspended. That is the benefit of having full custody of a cryptocurrency wallet.
We don’t want conflict, but when it becomes unavoidable or inevitable, what other choice is there but to explore the options. Crypto is one of those options that can bring aid to conflict zones, delivering help where it is needed. While it is good that various organizations are fundraising using crypto, if ever these turn out to be scams the government of Ukraine should issue a statement about it.
(Cover Photo Credit: cottonbro)
Disclaimer: Please DYOR always to verify facts when it comes to donations and cryptocurrency.