Bitcoin and Ethereum are legal tenders in Ukraine. They are a way to bypass international sanctions and facilitate a fast flow of funds to Ukraine. The crisis and subsequent adoption of these digital currencies have helped Ukraine prepare for the crypto bonanza. Ukraine is currently ranked fourth in the world regarding adopting digital currencies, with a deputy minister of digital B2Trader. What’s more, the war in Ukraine has opened the doors for the crypto boom.
Bitcoin and Ethereum are legal tenders in Ukraine.
A new cryptocurrency law in Ukraine may soon make cryptocurrencies like Bitcoin and Ethereum legal tender. Although this does not put them on an equal footing with the hryvnia, it is part of a larger push to embrace the crypto space. Ukraine has announced plans to open the cryptocurrency market to businesses by 2022, and top government officials have been exciting their crypto credentials in Silicon Valley. Here’s how the new law could affect the cryptocurrency market in Ukraine.
The move to make cryptocurrency legal tender in Ukraine is an interesting step. El Salvador made cryptocurrency legal tender in September of last year, and both countries are developing a regulatory framework. The government of Ukraine is not yet ready to fully recognize Bitcoin as legal tender, but a team sent by President Zelensky is exploring the possibility. While this is a significant step, it will be difficult to make it a widespread practice and will likely face resistance from many.
In addition to the government’s efforts to make cryptocurrency legal tender, supporters of the Ukrainian government are sending in more crypto than ever. Many leaders of the country’s crypto ecosystem have shared their crypto wallet addresses with local groups. One NGO supports the Ukrainian military and raised several million dollars in crypto. These donations will go toward purchasing various items such as uniforms and food. Many of these fundraising efforts started months ago and picked up speed in early March.
It’s a fast and effective way for Ukrainians to get immediate funding for supplies.
The government of Ukraine has created a special website to centralize the crypto fundraising effort. They explain that they can accept several different cryptocurrencies, including the meme-inspired dogecoin. They can also accept donations in fiat currency, but they cannot make all purchases with crypto. They must convert some donations back to fiat currency before purchasing supplies.
As the war progressed, Ukraine began to experience a plethora of problems, including the destruction of infrastructure and the influx of refugees. Using crypto became extremely efficient and fast for Ukrainians to access funding for the war effort. The NFT UkraineDAO, created by Ukrainian developers, has helped the country raise over $1.5 million in ETH to help refugees and rebuild structures.
The crisis in Ukraine has not only caused a human tragedy but has also led to massive economic consequences. These consequences have rippled worldwide, as Ukraine’s economy has been severely affected. Energy and food prices have skyrocketed, and inequality has increased. Inflation is a real threat, and monetary systems are already under pressure. The war is also harming global financial systems.
It’s a way to bypass international sanctions.
Despite the international sanctions that have plagued Ukraine, it has not prevented many people from donating to humanitarian efforts. A Ukrainian IT worker has raised $400000 in cryptocurrency for the Ukrainian army. While the scale of the role of crypto is still unclear, it is becoming an increasingly popular way to help Ukraine in the war. Some cryptocurrency users fear that they can’t donate directly due to the complexities of compliance and bookkeeping.
The government of Ukraine has even launched a website to collect crypto donations. The site explains that donations can be made in several currencies, including the meme-inspired dogecoin. Donations in fiat currency are also welcome. While the government of Ukraine can’t spend all of the crypto donations, it converts some into fiat currency to purchase supplies. It’s not yet clear how much crypto will be needed to combat the Russian military and civilians in Ukraine.
A former banking regulator and cryptocurrency expert, Ross Dalston, has warned against parking a large amount of money in crypto exchanges as it could hurt the Russian government. Without a standard currency, Kremlin allies will find it difficult to buy food, spare parts for military equipment, and electronics that aren’t made in Russia. The Kremlin’s allies will have to resort to other currencies, including the euro, to make these purchases.
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