Money is pouring in to aid Ukraine's efforts against the Russian invasion – in the form of cryptocurrency. Around $20 million have been raised in crypto donations by the Ukraine's central bank and allied NGOs, estimates blockchain consulting firm Elliptic.
Why crypto?
Because it allows for quick, anonymous, cross-border payments which aren't dependent on financial institutions. Such a move also taps into the digital wallets of enthusiasts, many of whom have considerable disposable funds because of the recent crypto boom.
But Ukraine doesn't have a monopoly on this strategy. Russia could well use the decentralised nature of cryptocurrency to bypass economic sanctions, or at least mitigate its effects to a degree, a report by The New York Times suggests.
Ukraine passed a bill legalising cryptocurrency on 17 February, while Russia has introduced a crypto bill in its parliament.
Ukraine Wants a Crypto Crackdown on Russia
"I'm asking all major crypto exchanges to block addresses of Russian users. It's crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users," Ukraine's Vice Prime Minister Mykhailo Fedorov wrote on Twitter last week.
He had earlier said that there would be a "generous award" for any information about crypto-wallets of Russian and Belarusian politicians.
Several crypto exchanges have expressed support for Ukraine. Binance, for example, posted that it was donating $10 million, while Bankman-Fried, chief executive officer of FTX US, said his company handed out $25 to each Ukrainian on their platform.
Ukraine on 26 February had announced it is accepting cryptocurrency donations in Bitcoin, Ethereum and USD, shortly after passing its crypto bill.
Ukraine ranked fourth on Global Crypto Adoption Index, behind Vietnam, India, and Pakistan, according to research firm Chainalysis. About $8 billion of cryptocurrency passes through the country annually.
(With inputs from The New York Times.)
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