Multimillion-dollar digital currency donations and assistance to Ukrainians from major crypto exchanges. How does it work?
The war in Ukraine takes place not only on the battlefield, but also on virtual fronts. So the multi-million dollar help from crypto exchanges and virtual asset users can be interpreted as the world’s “first cryptocurrency war”.
The unity of the world of virtual assets against aggression is very strong. Ukraine’s CryptoFund has already raised over $60 million for the Ukrainian Armed Forces. While one of the largest crypto exchanges, Binance, has provided $10 million in support to Ukraine and plans to increase this amount to $20 million in the near future. Also, Ukraine has shown itself as one of the leading countries in the use of cryptocurrencies, so such assistance is very relevant now.
Under war conditions, crypto-assets are perceived by Ukrainians as an alternative to fiat money. This shift from public and private financial institutions to crypto exchanges is linked to the fear of losing money in wartime. Some people are trying to save their money by using cryptocurrencies because of a possible future downfall of the economy. Therefore, the launch of a special Binance Refugee card for Ukrainians by Binance has been very positively received. It will allow displaced Ukrainians to make and receive cryptocurrency payments, as well as pay for purchases in shops in the European Economic Area. Plus, Ukrainians will be able to get help from Binance and other charities on the card. A nice bonus will be the ability to accrue $75 per month for three months, in line with UNHCR’s recommended donation level. The money will come in the cryptocurrency BUSD, which will be converted into local currency when you pay with the card. The card can be obtained and used free of charge by registering an account in Ukraine.
But speaking of the pros of crypto-assets, it is worth mentioning the risks that arise with their use. For example, cryptocurrencies allow hiding the origin of transactions and thus weaken the impact of economic sanctions on Russia. There are real-life examples of manipulation by Iran, which circumvented trade embargoes by using mining. So since the beginning of the war, Ukraine’s Minister of Digital Transformation, Mikhail Fedorov, has been calling on cryptocurrency and blockchain platforms to block Russian users’ wallets. And now Binance has recently imposed restrictions on Russian crypto-exchange users whose total value of crypto-assets exceeds €10,000.
Thus, the crypto world is influencing the events in Ukraine, by raising millions to support our army and citizens. As well, we see virtual currencies and exchanges taking on a new proactive role among traditional financial structures.