After a price drop destroyed the country’s fundraising efforts in May, Ukraine, which has been pummelling by three months of war, expects to continue to harness crypto investors to help collect finances.
Following Russia’s invasion of Ukraine on February 24, the Ukrainian government requested cryptocurrency donations on social media. At the World Economic Forum in Davos this week, Ukraine’s Vice Prime Minister Mykhailo Fedorov tried to rally crypto investors.
The government’s “Aid for Ukraine” fund said on March 19 that it had raised more than $60 million in cryptocurrencies. But, according to Ukraine’s deputy minister for digital transformation, Alex Bornyakov, the total raised two months later, on May 19, was $51.5 million.
In recent weeks, cryptocurrency prices have plummeted.
Following a 17 percent decrease in April, Bitcoin has lost more than 20% of its value in May, illustrating the risks faced by investors of the extremely volatile assets.
The government was able to spend $45 million of the monies raised in the “Aid for Ukraine” fund on equipment for Ukraine’s army before the crash, according to Bornyakov in written responses to Reuters inquiry.
Ukraine has used bitcoins to help support its war effort. Bitcoin payments to Ukrainian volunteer groups, some of which supplied equipment to government forces, increased in the year leading up to the war.
While cryptocurrency may bring some much-needed revenue, Kiev has calculated that it would require $15 billion in the coming three months to assist its war-torn economy recover.
Despite the volatility, crypto assets continue to attract Ukrainians looking to raise capital.
Obolon, Ukraine’s largest independent beer brand, intends to sell non-fungible tokens (NFTs) to assist in the distribution of free water for humanitarian needs.
It is following in the footsteps of Ukraine’s Ministry of Digital Transformation, which raised 286 ether (about $550,000) through their online “Museum of War” NFT collection.
After the conflict, Obolon proposes to sell 5,000 NFTs for 0.1 ether (about $200) each, which can be swapped for a commemorative beer bottle.
“This project is directly to help us continue to scale, because today the financial situation in the company is difficult because in Ukraine the economic situation is very difficult,” Olexander Chub, Obolon’s director of foreign trade, said in a video interview.
(Adapted from FinancialExpress.com)