Donating and buying with cryptocurrency is not a novel notion. However, the continuing conflict involving Ukraine and Russia has highlighted the advantages of adopting digital currencies for military aid.
Amid Russia's assault on Ukraine in February 2022, the Ukrainian government used the internet to solicit cryptocurrency donations. There was an enormous outpouring of support, with over a hundred thousand people pledging money to the Ukrainian military.
Military aid in cryptocurrency use is not restricted to monetary donations. Ukraine has reportedly been utilizing (1) cryptocurrency to buy helmets, bulletproof vests, optical sights, and other vital pieces of military equipment, as reported by Alex Bornyakov, the nation's deputy digital minister.
Bornyakov claims that over 60% of military gear suppliers embrace crypto, giving the government a significant financial advantage as the war continues.
Crypto in All Forms of Disaster
Because of its central location in Ukraine, the capital city of Kyiv stood to gain from the development of crypto networks after the invasion began. A year ago, Ukraine ranked fourth globally in bitcoin adoption, according to a market research firm.
In September 2021, Ukraine will formally acknowledge cryptocurrencies.
Using digital currency offers some benefits, including that transactions are done more quickly. The digital policy minister stated that the usual finance systems would have been too slow, and the Ukrainian military required assistance urgently. Yet, with crypto, the transactions would be instant and secure.
The Ukrainian government rapidly understood that cryptocurrency donations were the fastest and easiest way to handle the rush of money that had begun coming in from around the world (almost $55 million in a week back in March).
Moreover, Binance, the nation's biggest cryptocurrency exchange, has developed a "Ukraine Emergency Relief Fund," a crypto-first fundraising page that accepts coin donations. In addition, they provided the Ukrainian government with $10 million.
Using Crypto as a Quicker and More Secure Alternative
Also, the decentralized structure of cryptocurrency payments is an advantage for making large military purchases. Crypto payments are instant and decentralized, unlike those processed through traditional financial institutions like banks.
When asked about this, Bornyakov made the following statement.
Surprisingly, almost 60% of our suppliers could accept cryptocurrency; this made it possible for us to quickly and easily purchase necessities.
The Ukrainian government stated that some of the donations originated from Russians who wished to support Ukraine's defense efforts, a claim made possible by blockchain technology's transparency.
It has not gone undetected that Ukraine has successfully used cryptocurrency for military help. The country has also started a program called Crypto Fund Help For Ukraine.
Kuna, a cryptocurrency exchange based in Ukraine, and Everstake, a blockchain firm also based in Ukraine, are behind CFAK, with backing from the Ukrainian Ministry of Digital Transformation.
One-third of the total amount donated came from CFAK. Therefore it was successful. Bornyakov lauded the work, noting how quickly and easily the funds could be accessed thanks to cryptocurrency.
Bornyakov, the government's de facto crypto spokesman, claims that Ukraine has received roughly $100 million in crypto contributions.
More than $60 million of the $100 million was placed into the main fund administered by the Ukrainian crypto exchange Kuna, the official revealed at a recent live emergency briefing.