Crypto Demonstrates Its Utility Amid The War In Ukraine 14

Crypto Demonstrates Its Utility Amid The War In Ukraine

  • The war in Ukraine has given crypto the opportunity to prove its utility.
  • The partnership of humanitarian groups Stellar and Circle has enabled the distribution of millions in crypto donations. 
  • Crypto has helped Ukrainian refugees by circumventing geographic and institutional barriers. 

It has been a little over a year since Russia invaded Ukraine. In the weeks following the invasion, thousands of Ukrainian citizens turned into refugees in what the United Nations described as “the fastest, largest displacement in decades.” During this period, ensuring support for refugees and citizens affected by the war has emerged as one of the major concerns. 

Humanitarian groups utilize crypto for sending aid

The United Nations High Commission for Refugees (UNHCR) has played an instrumental role in delivering aid and support to the refugees in Ukraine. However, the UN refugee agency faced its fair share of problems while providing humanitarian aid to those affected by the war. These included the logistical challenges of distributing cash and the rigidity associated with banking institutions which caused problems for refugees with no documentation. 

According to a report by Wired, the UNHCR navigated this challenge by partnering up with the Stellar Development Foundation, the nonprofit organization behind the Stellar blockchain network. Both organizations have been working with cross-border p2p payments giant MoneyGram, and Circle Internet Financial, the issuer of the USD Coin stablecoin. Together, this group has set up a cross-border system that sends monetary aid directly to the refugees in Ukraine via crypto. 

“This project is a prototype but a very real one. If you can solve the gaps in money logistics in such an acute conflict, it stands to reason that these types of innovations would be meaningful” in other contexts too.”

Dante Disparte, Chief Strategy Officer at Circle.

As per Wired’s report, the United Nations refugee agency sends USDC hosted on the Stellar Network to the digital wallets of Ukrainian refugees. The stablecoins are then exchanged for local fiat currencies by the refugees through their nearby MoneyGram facility. UNHRC Treasurer Carmen Hett believes that by using crypto assets to distribute donations, the exposure to failure of banks is managed, in addition to ensuring that funds aren’t withheld from those who need them.