Crypto has long been used for donations and purchases, but the conflict between Ukraine and Russia has put a spotlight on the benefits of digital currency for military aid.
Since the invasion of Russia in February 2022, the Ukrainian government has turned to social media to solicit donations in Bitcoin, Ethereum, and other types of cryptocurrencies. The response was overwhelming, with more than 100,000 people contributing to the Ukrainian armed forces.
60 percent of arms suppliers accept crypto payments
How the Ukrainian government is using cryptocurrency goes beyond collecting donations. According to Alex Bornyakov, Ukraine’s deputy minister of digital affairs, the country uses cryptocurrencies to buy military supplies such as helmets, body armor, optical sights and other combat equipment. In fact, according to Bornyakov, 60 percent of weapon suppliers accept crypto payments.
Crypto plays a vital role in times of crisis
Since the outbreak of the conflict, Kiev has benefited from the growth of crypto networks. By 2021, according to a market research firm, Ukraine will be among the top 4 countries in the world in terms of adoption of cryptocurrencies. In September 2021, Ukraine formally recognized cryptocurrencies. This has enabled the country to reap the benefits of digital currencies in an unprecedented time of crisis.
One of the advantages of using digital currencies is the speed of the transactions. According to the digital minister, traditional financial systems were taking too long and the Ukrainian army needed immediate help. The use of crypto allowed purchases to be made quickly and efficiently.
As international donations started rolling in, the Ukrainian government quickly realized that crypto donations were the fastest and most efficient way to handle the influx of money.
Another benefit of using crypto to purchase military supplies is the decentralized nature of cryptocurrency payments. Unlike traditional financial systems that require intermediaries such as banks and payment processors, crypto payments can be completed instantly and without delay.
We were able to secure the purchase of vital items via crypto in no time, and the amazing thing is that about 60% of the suppliers were able to accept crypto, I was not expecting this.
— Bornyakov
The transparent nature of blockchain technology also allowed the Ukrainian government to see where the donations came from, claiming that some came from Russians who wanted to support Ukraine.
Crypto will continue to play a role in the war
Unfortunately, the conflict between Ukraine and Russia is still 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 to provide critical support to the country’s military effort.
As the use of cryptocurrencies continues to grow and evolve, it will be interesting to see how it is used in other areas of conflict and crisis.
