By Chyung Eun-ju and Joel Cho
With the devastation of the recent Russian invasion of Ukraine, Ukraine has been receiving a lot of financial aid via cryptocurrencies. With the decentralized nature of crypto, this form of digital currency has proven to be a powerful tool helping Ukraine fight back against Russia.
Since the invasion, donations in cryptocurrencies have reached a total of almost $100 million and the Ukrainian government has legitimized crypto platforms to allow users to operate inside the country, during these calamity times.
Most recently, Ukraine started auctioning off a collection of non-fungible tokens (NFTs) as an expansion to its crypto fundraising push, in a collection called "Meta History: Museum of War."
This initiative is signed under the Ukrainian Ministry of Digital Transformation, with the official mission "to preserve the memory of the real events of that time, to spread truthful information among the digital community in the world and to collect donations for the support of Ukraine."
Basically speaking, the NFTs in this collection are records of real official news pieces and illustrations from both Ukrainian and international artists.
So although NFTs have been losing their momentum and popularity in the last couple of months, it seems they have found a place as an incredibly useful fundraising tool for Ukraine.
Because of the decentralized nature of most cryptocurrencies, NFTs serve as a more rapid tool for obtaining financial aid, since transactions involving cryptocurrencies are usually more rapid than conventional transactions via financial institutions.
The Ukrainian Ministry of Digital Transformation has also marketed the "Meta History: Museum of War" as a digital record of the events in the current war through the lenses of the Ukrainian population.
Alex Bornyakov, the deputy minister of the Ukrainian Ministry of Digital Transformation, tweeted on March 25, "Today IT, blockchain and NFT are the tools that work to preserve the statehood and history of Ukraine. With the support of our partners we've launched the NFT-museum @Meta_History_UA . Rebuilding the country requires modern solutions."
This marks a historical moment, as a sovereign country acknowledges and uses cryptocurrencies as a relevant source for funding its military. This move has definitely shined a light on the benefits of digital assets.
So despite the decreasing popularity and value of NFTs and the still-unresolved issues surrounding them, there seems to be evidence that NFTs are not just an unsustainable bubble waiting to be popped.
The Ukrainian government's push for cryptocurrencies as an official tool for collecting financial aid definitely contributes to consolidating digital assets, including NFTs, as more than just an investment craze.
However, just as cryptocurrencies may serve as a fundraising tool, there's also risks that have become even more evident with the current war. As the West adopts sanctions against Russia, concerns are being raised over the potential of cryptocurrencies as an escape from the restrictive measures being imposed on Russia.
In the case of Russia, the decentralized nature of cryptocurrencies also plays a part, but this time as a mechanism to avoid international sanctions. However, although the concerns around the use of crypto are comprehensible, there are convincing arguments that help outweigh the concerns and risks being discussed.
One of the most convincing arguments is that cryptocurrencies do not have the liquidity to absorb all the sanctions being imposed. Furthermore, since cryptocurrencies rely on blockchain, all transactions are recorded permanently, therefore identifying if Russian oligarchs or even Putin himself conducted cryptocurrency transactions would not be impossible.
Additionally, crypto may serve as an option for refugees to ensure that they have funds no matter what jurisdiction they end up in, as well as a safeguard in the possibility of a Russian takeover of the Ukrainian financial system.
So although it may seem that cryptocurrency is a double-edged sword, the role it has played in aiding the innocent during the current devastating Ukraine conflict has proven that it can be a powerful tool to both governments and their people.
Chyung Eun-ju (ejchyung@snu.ac.kr) is studying for a master's degree in marketing at Seoul National University. Her research focuses on digital assets and the metaverse. Joel Cho (joelywcho@gmail.com) is a practicing lawyer specializing in IP and digital law.
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| Chyung Eun-ju |
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| Joel Cho |
Since the invasion, donations in cryptocurrencies have reached a total of almost $100 million and the Ukrainian government has legitimized crypto platforms to allow users to operate inside the country, during these calamity times.
Most recently, Ukraine started auctioning off a collection of non-fungible tokens (NFTs) as an expansion to its crypto fundraising push, in a collection called "Meta History: Museum of War."
This initiative is signed under the Ukrainian Ministry of Digital Transformation, with the official mission "to preserve the memory of the real events of that time, to spread truthful information among the digital community in the world and to collect donations for the support of Ukraine."
Basically speaking, the NFTs in this collection are records of real official news pieces and illustrations from both Ukrainian and international artists.
So although NFTs have been losing their momentum and popularity in the last couple of months, it seems they have found a place as an incredibly useful fundraising tool for Ukraine.
Because of the decentralized nature of most cryptocurrencies, NFTs serve as a more rapid tool for obtaining financial aid, since transactions involving cryptocurrencies are usually more rapid than conventional transactions via financial institutions.
The Ukrainian Ministry of Digital Transformation has also marketed the "Meta History: Museum of War" as a digital record of the events in the current war through the lenses of the Ukrainian population.
Alex Bornyakov, the deputy minister of the Ukrainian Ministry of Digital Transformation, tweeted on March 25, "Today IT, blockchain and NFT are the tools that work to preserve the statehood and history of Ukraine. With the support of our partners we've launched the NFT-museum @Meta_History_UA . Rebuilding the country requires modern solutions."
This marks a historical moment, as a sovereign country acknowledges and uses cryptocurrencies as a relevant source for funding its military. This move has definitely shined a light on the benefits of digital assets.
So despite the decreasing popularity and value of NFTs and the still-unresolved issues surrounding them, there seems to be evidence that NFTs are not just an unsustainable bubble waiting to be popped.
The Ukrainian government's push for cryptocurrencies as an official tool for collecting financial aid definitely contributes to consolidating digital assets, including NFTs, as more than just an investment craze.
However, just as cryptocurrencies may serve as a fundraising tool, there's also risks that have become even more evident with the current war. As the West adopts sanctions against Russia, concerns are being raised over the potential of cryptocurrencies as an escape from the restrictive measures being imposed on Russia.
In the case of Russia, the decentralized nature of cryptocurrencies also plays a part, but this time as a mechanism to avoid international sanctions. However, although the concerns around the use of crypto are comprehensible, there are convincing arguments that help outweigh the concerns and risks being discussed.
One of the most convincing arguments is that cryptocurrencies do not have the liquidity to absorb all the sanctions being imposed. Furthermore, since cryptocurrencies rely on blockchain, all transactions are recorded permanently, therefore identifying if Russian oligarchs or even Putin himself conducted cryptocurrency transactions would not be impossible.
Additionally, crypto may serve as an option for refugees to ensure that they have funds no matter what jurisdiction they end up in, as well as a safeguard in the possibility of a Russian takeover of the Ukrainian financial system.
So although it may seem that cryptocurrency is a double-edged sword, the role it has played in aiding the innocent during the current devastating Ukraine conflict has proven that it can be a powerful tool to both governments and their people.
Chyung Eun-ju (ejchyung@snu.ac.kr) is studying for a master's degree in marketing at Seoul National University. Her research focuses on digital assets and the metaverse. Joel Cho (joelywcho@gmail.com) is a practicing lawyer specializing in IP and digital law.
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