In Ukraine, Bitcoin has come to the rescue

Coins like Bitcoin and Ethereum have emerged as a major source of funding for Ukraine's battle against Russian military intervention.

In the midst of conflict, how is Ukraine's fledgling cryptocurrency business reshaping the country's image and making an impact?

During the early stages of the fighting, Ukrainian authorities revealed addresses for two crypto wallets on its Twitter account, providing donors with a straightforward location to deposit funds to.

It took just four days for these wallets to amass a total of more than $10,2 million ($9,2 million euros).

Michael Chobanian's "Crypto Fund for Ukraine" has raised more than US$100 million in crypto since then, accounting for more than 60% of all donations to Ukraine.

"We haven't given up on crypto yet. It's going towards things like food rations and protective gear like helmets and bulletproof vests "explained the Ukrainian woman, 37.

A humanitarian fund and a military fund were initially established up to help Ukraine's armed forces.

According to Chobanian, the finances were combined and focused only on assisting Ukraine's military when conflict broke out across the country.

He said that Bitcoin, Ethereum, and the stablecoin Tether — a coin tied one-to-one to the US dollar – accounted for the vast majority of crypto contributions.

United States and EU aid programs dwarf cryptocurrency donations, although the latter allow citizens to become involved in helping Ukraine

The Giving Block, a US crypto charity, believes bitcoin donations might attract "younger contributors" who are interested in supporting a variety of causes.

The fact that geopolitical and socioeconomic events have less of an impact on crypto contributions makes them even more valuable to Ukraine. Chobanian cites inflation as the cause of the devaluation of the Ukrainian hryvnia.

A benefit of making a donation in cryptocurrency is the speed at which funds may be sent. Bank wires between nations may take up to 24 hours to be confirmed. However, bitcoin transfers are usually quicker.

Despite crypto's success in supporting Ukraine's war effort, it hasn't always been a pleasant journey.

There were initial plans to launch Ukraine's own cryptocurrency as a symbolic gesture in support of Kyiv's cause, but those plans were later scrapped.

People took the chance to create and sell counterfeit copies of the proposed government-issued crypto.

By contrast, Chobanian claims that "there was a lack of communication" in the government, which is where he currently works.

He recalls, "It was the very first day of the fight."

As a means of trade in cybercrime, tax evasion, and outright capital flight, cryptocurrencies have taken root in Ukraine's shadow economy.

Transactions from Eastern Europe to other areas are notably high, and the company indicates that "capital flight might explain" for some of the crypto movement in the region, according to data analytics company Chainalysis

Chobanian believes that despite the dangers involved with crypto, the Ukrainian economy will benefit from its adoption.

"We will use blockchain technology to reconstruct Ukraine when we win the battle. Cryptocurrency has been a boon to all of us "he explained.

It is true that Chobanian's goals are lofty, but their foundation is solid.

Volodymyr Zelenskyy, Ukraine's president, signed into law a measure on Wednesday that would allow crypto platforms and users to operate in the nation.

International public policy and research chief Caroline Malcolm of Chainalysis says the turmoil in Ukraine "is driving governments to enhance their grasp of cryptocurrencies and their regulation.".

This might lead to "proportionate and effective regulatory regulations" for the crypto business, she says.

A recent executive order issued by US President Joe Biden shows Washington's willingness to deal with an ever-expanding and new asset class: cryptocurrency. (AFP)

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