Ukraine crisis: Crypto as an alternative for sending/receiving financial aid

As the world was struggling to rebound from the devastating social and economic effects of the Covid-19 pandemic, another catastrophe hit: the invasion of Ukraine by Russian forces. International organisations and humanitarian agencies are asking for donations to help alleviate the crisis in Ukraine. The government is also asking for help from aid agencies and individuals worldwide. 

To increase the donations, the central bank of Ukraine introduced a special account where funds could be sent to aid the Ukrainian army. In times of war, it is difficult to depend on traditional financial systems due to banking restrictions or for fear of surveillance. Various financial institutions are curtailing crowdfunding efforts by limiting the amount of money that can be sent to Ukraine. Money transfer institutions such as Wise have limited transfers to 2500 pounds/euros/dollars. What is the alternative if you cannot rely on established financial institutions? 

Thanks to the rise of cryptocurrency, there are now more options for donors to send their contributions or participate in funding efforts. Traditionally, for anyone wishing to send financial aid, you had to rely on big and established institutions such as Red Cross. All donations were to be channelled directly to such institutions, but now you can send any donations directly to the affected population. Cryptocurrency donations have taken centre stage in helping the country and the population cope with war. About two days after the war started, Ukraine received over $5 million in crypto donations. 

Crowdfunding endeavours are being carried out online, with people worldwide sending their donations in cryptocurrencies such as Bitcoin, Ethereum, and other tokens. Ukraine officials are also sharing details for their crypto wallets to fund the humanitarian and war efforts in the country. The country shared its Bitcoin and Ethereum wallets on Twitter to allow for direct crypto contributions. To avoid doubt, Ukraine’s minister of Digital Transformation, Mykhailo Fedorov, confirmed the authenticity of the crypto wallets. By March 2, 2022, people had sent over 153 BTC ($6.29 million) and more than 2,230 ETH ($6.27 million) to Ukraine’s crypto wallets. Non-profit organisations such as Come Back Alive also share their banking and crypto wallet information to accept donations to aid Ukraine. 

Humanitarian Crisis In Ukraine 

On February 24 2021, Russia launched a military invasion of its neighbouring country Ukraine, escalating the tensions in the region, Europe, and the US. Since then, Ukraine’s residents have been suffering to escape the war or picking up arms to defend themselves. As the conflict escalates, the US and the European Union send humanitarian aid to Ukraine and neighbouring countries such as Moldova and Poland, accommodating refugees fleeing the war. The Russia-Ukraine conflict has been brewing since 2014, and the European Commission has allocated over €193 million in humanitarian aid. The military invasion has seen a rise in the need for more aid to the country, necessitating the commission to allocate an additional €90 million to help with the unfolding humanitarian crisis. According to the United Nations, even before the full-scale invasion, Ukraine needed humanitarian assistance, with about 3 million people affected by the 8-year-long conflict. The invasion has seen the world come together to condemn the conflict and pull resources to try and help avert the crisis. The war has damaged critical infrastructure and led civilians to flee, with people living in subways and dire need of water, food, and shelter. As the world watches these events unfold, they are compelled to help somehow. 

Takeaway 

With the limited financial option offered by traditional banking institutions, cryptocurrency can go a long way in funding vulnerable populations in Ukraine and worldwide.