Ukraine Legalized Cryptocurrency Just Days Before Russia Invaded
As the world looks at Ukraine with tired eyes, there has been growing discussion in far-flung capitals about the economic fallout of Russia’s invasion. Some say this conflict will cause significant damage to the economies of both countries, others are optimistic. But how and more importantly, why? Just days before the war broke out, Ukraine legalized cryptocurrencies. Verkhovna Rada – Parliament of Ukraine – passed the cryptocurrency bill with 272 out of 450 members voting in favor of the law. This has created a legitimate market for cryptocurrencies in Ukraine.
At the time, Mykhailo Fedorov, Deputy Prime Minister and Minister of Digital Transformation of Ukraine, said the new law was an “additional opportunity” for business development in the country. He added that Ukrainians will now have convenient and secure access to the global virtual asset market.
While the Ukrainian government did not say whether the move was linked to any threat of military conflict, tensions have been high on the Russia-Ukraine border for months. However, the bill was passed on February 17, just a week before the invasion began.
After the Russian attacks, the official Twitter manager of the Ukrainian government sought donations from everyone, including those outside the country. The pinned tweets said, “Side with the people of Ukraine. Currently accepting crypto donations. Bitcoin, Ethereum and USDT. The tweet included the addresses of two crypto wallets – one that only accepts Bitcoin and the other that accepts Ether and Tether, a token that tracks the US dollar.
The Ukrainian government has shown enthusiasm in crowdfunding Russia’s military action. According to blockchain analytics firm EllipseThe Ukrainian government — and NGOs that provide support to the military — has raised more than $24 million in crypto to date.
Cryptoassets have emerged as an important alternative crowdfunding method because they allow quick access by recipients by removing middlemen from the transaction process. Bypassing intermediaries such as banks allows recipients to reduce the risk of contributions being withheld or frozen by financial institutions.
