Crypto accepted by 60% of arms and equipment suppliers for Ukraine, officials say
Using crypto for donations and purchases is not a new concept. However, the ongoing conflict between Ukraine and Russia has shed light on the benefits of using digital currencies for military aid.
When Russia began its invasion of Ukraine in February 2022, the Ukrainian government turned to social media to ask for donations in bitcoin, ethereum, stablecoin and other types of cryptocurrencies.
The response was overwhelming, with more than 100,000 people contributing to aid the Ukrainian military effort.
Image: FXVNPro
The use of cryptocurrencies for military aid is not only limited to donations. According to Alex Bornyakov, Ukraine’s deputy digital minister, the country has used crypto to buy combat items such as helmets, bulletproof vests, optical sights and other combat equipment.
According to Bornyakov, around 60% of the military hardware vendors were able to accept crypto, which is proving to be very beneficial on the part of the government as the conflict rages.
Crypto plays a crucial role in times of crisis
Ukraine’s capital Kyiv was in a decent place to benefit from the expansion of crypto networks since the invasion broke out. A market research firm ranked Ukraine 4th worldwide for cryptocurrency usage last year.
Ukraine officially recognized cryptocurrencies in September 2021.
Image: Money
An advantage of using digital currencies for these purchases is the speed with which they can be completed. The digital minister explained that traditional financial systems would take too long and the Ukrainian military needed help immediately. But with crypto, the purchases could be made quickly and efficiently.
When international donations started pouring in—almost $55 million in one week back in March—the Ukrainian government quickly realized that crypto-donation was the fastest and fastest way to handle the influx of money.
Binance, the largest cryptocurrency exchange in the world, has also launched a “Ukraine Emergency Relief Fund”, a crypto-first crowdfunding site that easily accepts crypto donations. They gave the Ukrainian government $10 million in addition to this.
Krypto: The faster and better solution
Another benefit of using crypto for military purchases is the decentralized nature of cryptocurrency payments. Unlike traditional financial systems that require intermediaries such as banks and payment processors, crypto payments can be made immediately and without delays.
Bornyakov said:
“We were able to secure the purchase of important goods in no time via crypto, and what’s amazing is that around 60% of suppliers were able to accept crypto, I didn’t expect this.”
The transparent nature of blockchain technology also allowed the Ukrainian government to see where the donations came from, and they claimed that some came from Russians who wanted to support Ukraine’s defense efforts.
Image: The Harriman Institute - Columbia University
Ukraine’s success in using cryptocurrencies for military aid has not gone unnoticed. In fact, the country has created the Crypto Fund Aid For Ukraine initiative.
CFAK is powered by a Ukraine-based crypto platform called Kuna and blockchain company Everstake, and supported by the Ministry of Digital Transformation of Ukraine.
CFAK has been a great success, with a third of the donated amount coming through the initiative. Bornyakov praised the effort not only for the amount of money raised, but also for the efficiency and speed of access to funds through crypto.
According to Bornyakov, who also serves as the government’s de facto crypto spokesperson, Ukraine has received around $100 million in cryptocurrency donations.
The official stated at a recent online crisis briefing that more than $60 million of the $100 million was deposited into the main fund managed by Ukrainian cryptocurrency exchange Kuna.
Crypto total market cap at $1 trillion on the weekend chart | Chart: TradingView.com
The conflict between Ukraine and Russia is ongoing, and the use of cryptocurrencies for military aid is likely to continue.
While crypto may not be a complete solution to the challenges facing Ukraine, it has proven to be an effective tool for providing critical support to the country’s military efforts.
As the use of cryptocurrencies continues to grow and develop, it will be interesting to see how it is used in other areas of conflict and crisis.
– Featured image from the New Statesman
