Why the role of crypto is huge in the Ukraine war: World Economic Forum

March 22, 2023

By Anjali Kochhar

The World Economic Forum (WEF) believes that cryptocurrency has played a prominent role in the Ukraine war. In an article, published last week, the organization reiterates that as the conflict enters its second year, over $212 million worth of crypto has been donated to pro-Ukrainian war efforts, according to Elliptic, a blockchain analytics firm. This includes roughly $80 million worth of crypto going directly to the Ukrainian government.

Crypto funds have been used to support a variety of war efforts, according to Ukrainian officials and government fundraising sites. Purchases range from bulletproof vests and helmets to demining equipment and drones. Other crypto donations have been spent on support materials like medical supplies and radios.

“The people of Ukraine are grateful for the support and donations from the global crypto community as we protect our freedom.”— Ukrainian government on Twitter, May 2022

The decentralized nature of crypto allows digital currencies to be traded quickly, making them a useful tool for getting money into conflict and disaster zones.

“An important benefit of these emerging technologies is the ability to mobilize, organize and deliver very quickly,” said Brynly Llyr, Head of Blockchain and Digital Assets at the World Economic Forum. “We’ve seen this play out in real time in Ukraine where you saw millions of aid delivered in a day.”

Chainalysis, another major blockchain analysis firm, reported that in the first month of the war, the Ukrainian government received more than $56 million in crypto donations. Most of the donations, Chainalysis found, have been made in bitcoin and Ethereum.

Non-fungible tokens (NFTs), which are unique digital assets generally created in a blockchain, have also been used to support the war efforts. For example, Ukraine DAO—a decentralized autonomous organization (DAO) set up to harness “the power of Web3 tech and community to defend Ukraine,” according to the online collective—auctioned off a Ukrainian flag NFT for $6.75 million.

Crypto is also being used to support Russia, albeit to a lesser degree. Chainalysis reported that roughly 100 pro-Russian groups have raised around $5.4 million worth of crypto over the past year. Meanwhile, Elliptic found that total pro-Ukrainian crypto fundraising since the war began to top pro-Russian funding by 44 to one.

In 2022, Ukraine ranked third in Chainalysis’ Global Crypto Adoption Index; Russia ranked ninth. Both countries, which experienced significant inflation and economic distribution because of the war, saw increases in crypto transfers immediately following the invasion, Chainalysis found.

“The war has affected virtually all aspects of life in the two countries, and cryptocurrency is no exception,” said Geography of Cryptocurrency Report 2022, Chainalysis.

About the author

Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.

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