Crypto Becomes the Preferred Choice for War Aid

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By A D

International dissent has showcased the potential of crypto in real-world conflicts and humanitarian efforts- facilitating access to funds for war-affected citizens and enabling easier dispersal of funds by humanitarian organizations.

Crypto, once a libertarian movement, has evolved into a financial revolution that transcends political boundaries. While it began as a means to break free from traditional banking systems and gain control over one’s finances, its significance has expanded.

For some, this vision of financial independence became a reality. They made the shift from traditional banking to crypto, embracing the idea that they, and only they, should have control over their funds. It was a bold step, and not everyone was ready to take it. Many people remained comfortable with their existing banking systems, despite their occasional overreach and control.

Fast forward to today, and the landscape has changed. Sanctions, like those imposed on Russia, have demonstrated the potential weaponization of traditional currencies. These sanctions affect not only nations but also individuals who find their financial freedoms compromised. The message is clear: your money should not be used as a tool against you, and it’s time to explore alternatives.

Read: Cryptocurrency for International Trade in Russia?

Russia-Ukraine War

The war in Ukraine has brought immense suffering to its people, both emotionally and financially. With Russia’s estimated daily spending of $20 million to sustain the invasion, and the Ukrainian government’s resource-intensive defense efforts, the financial toll is significant.

The Ukrainian government, facing a costly conflict, has resorted to various financial strategies. War bonds, donations from allies, and innovative approaches are all part of the mix. Notably, Ukraine’s Vice Prime Minister made a groundbreaking move by tweeting a request for donations in the world’s largest cryptocurrencies. The response was astounding, with more than $69 million of crypto pouring in from across the globe. This digital influx has proven to be a clever strategy, as it offers a level of security that traditional financial channels cannot match.

While the war’s devastating toll continues, Ukraine has received substantial assistance from various countries and individuals worldwide. Cryptocurrency has played a pivotal role in this support network, contributing over $212 million. This figure includes a substantial $80 million in crypto directly benefiting the Ukrainian government.

Ukraine has put these crypto donations to versatile use, bolstering its war efforts. Notably, these funds have financed a wide range of necessities, from essential safety gear such as bulletproof vests and helmets to critical equipment like demining tools and drones. Beyond military supplies, crypto donations have supported vital resources like medical supplies and communication tools, as highlighted in a World Economic Forum report.

During the war’s initial month, the Ukrainian government received more than $56 million in crypto contributions. A noteworthy aspect is that the majority of these donations were made in Bitcoin and Ethereum, underlining the significant role these cryptocurrencies play in humanitarian endeavors.

While pro-Russian groups have managed to raise around $5.4 million in crypto over the past year, Elliptic’s findings reveal a substantial contrast. Pro-Ukrainian crypto fundraising has outpaced pro-Russian efforts by an impressive 44-to-one ratio. This disparity showcases the overwhelming support for Ukraine’s cause within the crypto community.

Since the start of the war, Russian paramilitary groups, such as Task Force Rusich, have leveraged cryptocurrency donations to raise over $4 million. This strategy allows these groups to circumvent international sanctions imposed on them. The ease of promoting their cause on public platforms like Twitter and Telegram has enabled them to receive global financial support.

Although $4 million may not seem substantial in the broader context, the exchange rate of one Ruble being valued at less than two American cents amplifies its purchasing power in Russia. These funds have allowed Russian soldiers to acquire advanced equipment at a fraction of the cost compared to traditional means. From constructing advanced UAVs for $3,400 to purchasing 15 tactical radios for $650, the impact of these cryptocurrency funds is evident in enhancing reconnaissance capabilities.

One of the fascinating aspects of crypto is its resilience against potential seizure. Even if Russia gains control of Ukrainian banks, cryptocurrencies remain safely stored. This aspect of crypto is invaluable, especially in the face of geopolitical turmoil.

However, not all is smooth sailing. The war has disrupted internet connectivity in many regions, making cryptocurrency transactions challenging. To address this, Elon Musk’s SpaceX has activated its satellite internet service in Ukraine, offering a lifeline for crypto operations and enabling a more robust financial infrastructure.

As the conflict takes a toll on Russia, its citizens find themselves in the midst of a deepening recession. Credit cards have limited use, and cash access is restricted. In response, crypto funds are being sent to Russian citizens, providing a means of financial support. This move offers a glimmer of hope amidst the economic hardships.

Palestine-Israel War

The Israel-Hamas conflict, a longstanding crisis in the Middle East, has once again escalated, resulting in devastating consequences for both sides. The ongoing hostilities have resulted in tragic loss of life and raised concerns about the conflict’s potential impact on various aspects, including the cryptocurrency market.

The Israeli-Palestinian conflict, rooted in territorial disputes that date back to the late 19th century, has endured for over two centuries, shaping the region’s history and influencing global dynamics. The establishment of the State of Israel in 1948 ignited a series of wars and conflicts between Israel and neighboring Arab countries. Despite intermittent peace efforts, the question of Palestinian self-determination and self-governance has remained unresolved. In recent times, the conflict has taken a distressing turn, with Hamas launching a significant incursion into Israeli territory, triggering a fierce response of immense airstrikes from Israel.

hamas had taken aids in crypto before israel disrupted their efforts by banning crypto accounts.
Israel struck Al-Ahli Arab Hospital in Gaza City on Tuesday, killing more than 500 Palestinians. Image Source: New York Times

Hamas has reportedly received over $40 million in cryptocurrency donations, utilizing digital currencies to evade international sanctions. The Izz ad-Din al-Qassam Brigades, Hamas’ military wing, has received substantial bitcoin donations, particularly during periods of heightened conflict. These transactions have been facilitated through platforms like Binance, drawing attention to the role of cryptocurrencies in financing conflicts and circumventing financial restrictions.

In response to Hamas’ fundraising activities, Israeli authorities have taken steps to halt their operations. Israeli officers have shut down and seized 190 digital currency accounts allegedly connected to Hamas.

Geopolitical Factors and Crypto Market

The global geopolitical landscape often influences cryptocurrency markets, and the Israel-Hamas conflict is no exception. While no significant fluctuations in digital asset prices have been observed thus far, the situation could impact the short-term trajectory. Israel’s involvement in crypto mining suggests that any disruption in the mining process may lead to a sharp rise in the Bitcoin hash rate, potentially influencing its price. Furthermore, heightened global uncertainty resulting from the conflict might drive investors towards assets like Bitcoin, perceived as a store of value during times of instability. Despite potential short-term fluctuations, the overall trajectory for cryptocurrencies remains positive.

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