Crypto donations are a more efficient way to fund Ukraine's defense needs and are being spent on bulletproof vests and rations, a top minister says
- Crypto donations have helped to fund Ukraine's military defense more quickly and efficiently, a minister said.
- Transactions go through in minutes, rather than days as in the banking system, Alex Bornyakov said.
Cryptocurrency donations to Ukraine are proving an effective way to fund the country's forces in its war with Russia, one of its top ministers has said.
Ukraine's government has used the million of dollars in bitcoin and other cryptocurrency raised to buy protective gear and food, according to Alex Bornyakov, deputy minister of digital transformation.
"I can't tell, because it's an ongoing war, exactly what we bought," Bornyakov said on a Twitter Space discussion Monday.
"So far, we purchased 400,000 military grade rations for our army, because they really need this food. We bought thousands of bulletproof vests, and other kinds of protection which helped our military in day-to-day operations," he added.
Ukraine first began accepting cryptocurrency donations on February 26, just two days after Russia invaded the country. It tweeted out a call for support with wallet addresses for bitcoin, ethereum and tether, and has since added more digital currencies.
A key reason to accept cryptocurrency donations during the crisis is the speed at which transactions settle, according to Bornyakov. He noted that payments made via the traditional banking system take two or three days to go through.
The government needed a tool to help its army and help people much faster, the minister said, and crypto transactions were more efficient.
"Crypto was one of the ways we fight back, and specifically, why we leverage this is because we understood that our response has to be very quick," he said.
"With crypto, we can do those transactions in five minutes, in 10 minutes, and you don't have to get those approval through banks, the bank system," he added.
As of Tuesday, the Ukrainian government and NGOs have raised $59.7 million in cryptocurrency donations from more than 120,000 different wallet addresses, according to intelligence firm Elliptic.
Donations have come from polkadot's Gavin Wood — also a cofounder of ethereum — as well as crypto exchanges Binance and FTX.
Over the past week, the value of those funds has fallen somewhat as cryptocurrency prices dropped thanks in part to the uncertainty about the impact of the Russia-Ukraine conflict. Bitcoin and ethereum are down 11.86% and 13.75% respectively over the past seven days, while altcoins suffered heavier losses, according to CoinMarketCap data.
Ethereum cofounder Vitalik Buterin was also in the Twitter Space. He and Bornyakov spoke about the role Ukraine played in developing digital currency before the invasion, and how people might not realize the country has played a major role in crypto projects.
According to Chainalysis, Ukraine ranked fourth in its 2021 global crypto adoption index, and the country legalized cryptocurrency in September.