The tech-driven nation of Ukraine timed their crypto fundraising perfectly. All it took was a few forward-thinking government officials, and enough people who wanted to make a change.
With almost $100 million in cryptocurrency donations now raised, people are beginning to wonder, how else can we use crypto for good?
For years, digital currencies have been viewed with scepticism and distrust, particularly regarding transparency in transactions. This reticent mindset has been reciprocated throughout society and into both charitable and grassroots organisations, who in the past, have preferred the traditional route of fundraising through major banks.
However, attitudes towards conventional methods of raising money are changing. Never has there been so many people not only participating in the crypto community, but also placing trust into these systems of transactions.
Countries around the world are beginning to recognise the opportunities that crypto holds for humanitarian assistance. In fact, Finland’s Finance Minister recently announced that it will donate “tens of millions” of euros of seized Bitcoin to Ukraine.
Multiple companies and crypto exchanges have taken the lead by facilitating financial assistance for Ukrainian citizens. Binance, the largest exchange in the world, has provided support through their Binance Charity Foundation, which committed to contribute $10 million to those dis-placed by the war. Additionally, they created the Ukraine Emergency Relief Fund crypto crowdfunding site to support donations.
Following the success of these efforts, this style of fundraising has been adopted by various non-profits and influential organisations. The NGO Come Back Alive, began accepting crypto to fund Ukraine’s military forces, followed by other charitable organisations including Kyiv Independent, Nova Ukraine and Endaoment. The Russian punk band Pussy Riot have even launched their own UkraineDAO, which is currently selling 10,000 NFT’s and accepting direct crypto donations to help those in need ($5million+ already raised).
Other companies have taken a more direct route to facilitating aid. For example, the Himalaya Exchange raised funds amongst their ecosystem through its native trading coin (HCN) and stable coin (HDO). The proceeds were used to buy essential relief items including food, clothes and first aid kits, all of which was distributed by hand to Ukrainians.
HDO makes donations safe and secure – particularly given the recent dip in the crypto market. During this time, the stable coin is the only one of its kind to be stable at 1:1 with USD.
Conrad Pawelec from the Hong Kong People Association (HKPA), and the person responsible for donating the life-saving supplies to Ukrainians and delivering them to the Ukrainian border, says that “the speed that donations took place and the manner in which aid was provided, is yet another example of how crypto is saving lives”.
William Je, the CEO of Hamilton Investment Management Ltd and founder of cryptocurrency exchange platform Himalaya Exchange and the HKPA, says “whatever is allowed to happen in Ukraine today will inform the fate of Hong Kong and Taiwan tomorrow”. That is why the HKPA is committed to supporting those escaping Russia’s authoritarianism.
He adds that “while the world’s eyes are rightly glued to Ukraine, we must never lose sight of what the CCP is planning in the background”.
Simultaneously, the HKPA continues to provide guidance and support in terms of education, career, healthcare and adapting in a new community, guidance on welfare and financial advice for those fleeing Hong Kong.
This is not the first time we have seen crypto utilised effectively for the benefit of grassroots movements. We have seen the Bitcoin Beach project in El Salvador prove how a disadvantaged community could successfully use crypto in their daily lives, despite the technical difficulties and hardships that they faced.
We have also seen other instances when a community has been in crisis and subsequently used crypto to overcome a real humanitarian disaster. An example would be following the eruption of the Mount Nyiragongo volcano on May 22 2021 in the Democratic Republic of Congo. One program called the ‘Lightning torch’, effectively allowed individuals and companies to create a local Bitcoin economy which supported them through the crisis.
Despite these projects having their restrictions, it is more proof that digital currencies are effectively reaching harder to access communities, often where grassroots movements begin. The two main factors which these movements have in common, is that they require quick and un-restricted access to funds.
The conventional approach of using centralised banks as intermediaries often results in international transactions taking up to three days to be processed. In times of crisis, this can mean the difference between life and death.
Furthermore, many have had concerns that sending fiat currencies through the banking system can be high risk in certain circumstances due to accounts being closed with little notice. Therefore, for those wanting to have a secure and immediate impact, crypto is seen as the most direct route to provide support.
Although the wider community are not always directly accessing crypto wallets, we are seeing an increase in not only people who are donating, but also those who are opening crypto accounts. Dune Analytics, calculated that the number of new wallets which donated crypto to Ukraine’s Ethereum wallet, outnumbered its previous total number of donor wallets in only 18 hours.
What is unique about this moment in time, is that we are witnessing more trust in alt-coins (alternatives to Bitcoin) as a form of supporting grassroots movements. For instance, rather than only accepting Bitcoin and Ethereum, the Ukrainian government have now officially started accepting USDT, TRX, DOT SOL and even DOGE.
William Je, the CEO of Hamilton Investment Management Ltd and founder of the Himalaya Exchange, states that “as banking systems are impacted by financial sanctions or war, those people who seek to help others are looking to crypto to fill the gaps”.
We are witnessing a fundamental shift in the approach of grassroots fundraising away from established banks transferring fiat currencies and toward digital currencies facilitating support where it is required. With the efficiency and transparency of the various initiatives taking place in Ukraine, this approach will continue being refined and the trend is likely to be utilised for years to come.