Disclosure: The views and opinions expressed herein are solely those of the author and do not represent the views and opinions of the crypto.news editorial.
Two years have passed since the full-scale Russian invasion of Ukraine and the war is still ongoing. Ukraine continues to fight for its freedom, democracy and independence. In these difficult times, we have seen the use of new technologies changing the landscape, both on and off the battlefield. Cryptocurrencies and web3 technologies have become important tools in Ukraine's support arsenal. As a Ukrainian, cryptocurrency enthusiast and entrepreneur, this topic moves me deeply. Inspired by the resilience and innovation of Ukraine's defenders, I want to show how cryptocurrencies have made a tangible difference in these historic times.
Unprecedented support from the web3 community
Since February 2022, the global web3 community has rallied behind Ukraine, providing crucial financial aid and resources to the country's defense efforts. High-profile contributions, such as the $10 million from Binance crypto-first-crowdfunding-site-to-further-help-provide-aid-to-ukraine-6bce8615076a4173a4738817c597b09e” target=”_blank” rel=”noopener”>donation and Vitalik Buterin's $5 million in ethereum (eth), exemplify the crypto sector's ability to mobilize resources quickly.
These acts of generosity, added to crypto-card-for-ukrainians-forced-to-leave-ukraine-421499824684903753″ target=”_blank” rel=”noopener”>initiatives like Binance crypto card for refugees and educational support, highlight an overwhelming wave of support rooted in the web3: the spirit of decentralized empowerment.
Support has not been limited to financial donations. Vibe, Cardanoand Moles Co-founder Gavin Wood, among many others, have made significant contributions, demonstrating the industry's united front in helping Ukraine. This collective effort not only provides immediate relief but also cements the role of cryptocurrencies as a tool for geopolitical and humanitarian response. These and many other donations were made through cryptocurrency and have been especially useful during the first months of the war. International money transfers have incredibly high fees and take a long time to complete. Cryptocurrency donations continue to pour in to this day.
Blockchain's role in Ukraine's resilience
Ukraine's adoption of blockchain technology has been nothing short of revolutionary in its war efforts. The creation of official crypto wallets for donations illustrates a forward-thinking approach to maintaining sovereignty and operational integrity.
Additionally, the use of NFTs to document and immortalize the harsh realities of war crimes speaks to the innovative ways web3 technologies are being leveraged for justice and historical preservation.
Initiatives such as the $6.7 million nft-flag-war-fundraising/index.html” target=”_blank” rel=”noopener”>increase of UkraineDAO for a Ukrainian flag nft provides a new model for fundraising and awareness in the digital age. I have also been personally involved in the UACatsDivision nft collection, lifting $370,000 for our defenders.
Cryptocurrencies are the new cash
Ukraine is crypto-adoption-index/” target=”_blank” rel=”noopener”>classified fifth according to the Chainalysis report on the global cryptocurrency adoption index. Since the beginning of the large-scale invasion, people quickly learned about cryptocurrencies and started using them – the definition of grassroots growth.
More than 6 million people fled the country, and 7 million more were displaced internally, all trying to escape Russian aggression. All of these people had to leave their homes, belongings and property behind. Carrying a lifetime's savings in cash was dangerous, and we didn't know if the banks would survive (there have been dozens of cyberattacks on Ukraine's energy, financial, and telecommunications infrastructure). So people turned to cryptocurrencies as a safer alternative that works cross-border. In my opinion, cryptocurrencies are the new finance. It allows you to use your money however you want anywhere in the world. Today, cryptocurrencies have been converted into cash in Ukraine.
Despite the general decrease Looking at transaction volume in 2023, the granularity of transaction data reveals resilience between various segments of the crypto market. While large institutional transactions have slowed, smaller institutional and professional-sized transactions have shown relative stability, and retail transactions have remained consistent. This pattern indicates sustained engagement with cryptocurrencies among a broad spectrum of users, from small institutions to individual retail investors.
The impact of defi on the lives of Ukrainians
Many Ukrainians are displaced and cannot access the securities and loan markets. Here, the highly accessible defi system makes an impactful change.
A particularly positive development within Ukraine's crypto landscape is the growth of defi activities, which recorded 3%. increase in 2023, making it one of the few regions to experience such growth. This increase in Defi utilization can be attributed to increased uncertainty around regional regulations and the instability of centralized financial institutions. The non-custodial nature of Defi offers users more control over their funds, making it an attractive alternative in times of crisis and market volatility.
Despite difficult conditions, enduring interest and engagement in cryptocurrencies in Ukraine and across Eastern Europe highlights the potential of digital assets to offer accessible financial services. While traditional financial markets remain out of reach for many, the stability and growth of defi systems stand as a beacon of change, providing essential financial tools and opportunities for economic participation amid current geopolitical and economic challenges. .
Regulatory framework and the future of cryptocurrencies in Ukraine
Ukraine has taken important steps to align its national cryptoasset regulations with EU directives, in particular MICA, TFR and the new AML package. The Ukrainian Parliament passed the Law on crypto Assets before the war. Despite the turmoil of this war, regulatory bodies persist in developing these provisions to establish legal clarity and certainty within the industry.
The crypto ecosystem is strong in Ukraine. There are many engineers in Ukraine who are building the most important protocols in defi. While many have temporarily moved to other countries such as Portugal, many of the best Defi builders are still located in Ukraine. We can leverage the extreme grassroots adoption of cryptocurrencies and immense experience to introduce more innovative legislation for cryptocurrencies in Ukraine. Otherwise, we risk missing this unique opportunity to create a new future of finance and public services using blockchain technology.
Ukraine's top-five ranking in the global cryptocurrency adoption index and its burgeoning defi sector are testament to the country's resilience and innovation. Projects like Hacken, which is among Ukraine's top web3 startups, embody the spirit of Ukrainian tech diplomacy and the potential of a post-war economic resurgence driven by digital technologies.
hope for freedom
As we mark two years since the start of full-scale war, it is a time to reflect on the resilience and innovation that has emerged amid these difficult times. I have never seen the decentralized web3 so united by a single shared commitment to supporting Ukraine. I am immensely grateful to the global community for their unwavering support. This journey, while fraught with challenges, is also filled with hope: hope for freedom for the nation and its people.
