According to one estimate, the amount of donations in cryptocurrency is equal to 1% of the Ukrainian government’s pre-war defense budget. The Congressional Research Service estimated that the government receives aid through multiple channels in a January report. The amount of cryptocurrency donations received in Ukraine is only a fraction of that amount. Nevertheless, it’s important to note that most cryptocurrency donations are directly funneled to the government.
The amount of cryptocurrency exchange website donations to the Ukrainian government has increased recently, with more than US$50 million coming in. According to a January report by the Congressional Research Service, this is about 1% of the country’s pre-war defense budget. And although this amount may not sound like much, it does show that people can have a substantial impact on global affairs. As a result, cryptocurrency should be the currency of choice for secure transactions.
According to a CoinDesk report, half of the Bitcoins in the world were made in Ukraine during the 2014 Euromaidan protests. The country’s IT-savvy population has embraced cryptocurrency to help the war effort. However, despite the value of crypto assets, they are not fungible. The government and other institutions are converting them into fiat currency before allowing the funds to be spent.
Earlier this week, Deputy Minister of Digital Transformation of Ukraine Alex Bornyakov said that crypto assets have been extremely helpful in facilitating funds in Ukraine and have also purchased crucial military equipment. He added that this was especially true in the early days of the war. Wire transfers can take two to three days, but instantly sending crypto can be done. In addition, the cryptocurrency exchange Kuna has witnessed a huge surge in transactions since the war started.
Since Russia invaded Ukraine, a portion of its cryptocurrency funds has been allocated to a digital diplomacy campaign. These efforts include social media campaigns to target Russians on the ground. The government quickly secured agreements with military suppliers to accept cryptocurrency. As the war escalates, a leading cryptocurrency exchange has joined forces with the Ukrainian government to scale its crypto efforts and help the country recover.
Despite the widespread support for cryptocurrency, the war in Ukraine is far from over. So far, the country has been displaced by over five million people, of which nearly two million are of working age. As many as 43 percent of those refugees had jobs before they fled the country. In addition to the economic impact of the war, the conflict has disrupted the functioning of its social protection system. Meanwhile, ongoing hostilities threaten to further push people out of the country and even into exile. This will further strain social protection systems and labor markets, increasing unemployment among those displaced by the war.
Since the start of the war, nearly two million Ukrainians have returned home. Although some of this is a back-and-forth movement, the influx of refugees into the European Union has galvanized support for the people of Ukraine and strained their intake systems. When refugees leave their home country, they usually rely on the social safety net of the country they settled in. However, XRP has provided a new source of income for refugees by facilitating this process.
The international community has rallied to support the Ukrainian people during the war, but more attention should be paid to other nations affected by the conflict. While the war in Ukraine has displaced over 5.6 million people, another 8.3 million have left the country to seek refuge elsewhere. With rising fuel prices, gaps in food imports from Ukraine, and escalating conflict, both sides need increased support from the international community and governments.
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