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The impact of Russia’s invasion on Ukraine’s blockchain strategy

These monies were used to assist humanitarian organisations in distributing relief throughout the country, as well as to purchase vital supplies for soldiers such as food, uniforms, and bullet-proof vests. They’re also being utilised to assist Ukraine’s burgeoning cyber warriors, who have reportedly damaged Russian government websites, supplied intelligence, and brought down military systems. This, however, did not happen.

Digital assets and blockchain technology, according to Ukraine’s deputy minister for digital transformation Alexander Bornyakov, are intended to help reinvigorate the Ukrainian economy and bring all government activities online. He said the ministry’s objective, which began two years ago, is to “bring 100% of government services online and develop a digital state to make all government services transparent, easy to use, and convenient for Ukrainian residents.”

The minister of digital transformation and his staff assisted in the formulation of a law a year and a half ago to legitimise digital assets in the country and make Ukraine one of the most crypto-friendly countries in the world, including the creation of the e-hryvnia, a central bank digital currency.

With the Russian invasion, however, all of those plans were thrown out the window. Instead, the Ukrainian government sought to apply its expertise in cryptography and digital assets to aid the military effort. Bornyakov claims that after a few days of fighting, they decided to ask for cryptocurrency donations. “We decided we needed money to travel in [to the nation] on the second or third day because there was a difficulty with banking liquidity.”

Bornyakov also claims to have received a call from his boss, Mykhail Fedorov, the minister of digital transformation, who stated that they wanted to support the cash-strapped army and asked if they could put up a means for individuals to give crypto assets.

It wasn’t quite that straightforward, though. With increasing concerns about cryptocurrency theft (according to crypto analytics firm Chainalysis, $14 billion in cryptocurrency was stolen by scammers last year), the government sought to ensure that its funds were safe. It wants to be able to convert the assets into fiat currency as well. They went to Kuna, the country’s largest exchange. “When it comes to security, there’s a lot of nuance, because if you don’t safeguard your infrastructure, someone might hack you and steal all of your crypto… But it’s not only about security; it’s also about the capacity to exchange assets into various fiat currencies.

Ukraine was meant to use cryptocurrency as a springboard into the future. Instead, it is proving to be a vital lifeline in a war-torn country. Since Russia’s invasion on February 24th, Ukraine has received over $56 million in donations in a variety of digital currencies, including bitcoin, ether, polkadot, solana, dogecoin, tether, and others.

These monies were used to assist humanitarian organisations in distributing relief throughout the country, as well as to purchase vital supplies for soldiers such as food, uniforms, and bullet-proof vests. They’re also being utilised to assist Ukraine’s burgeoning cyber warriors, who have reportedly damaged Russian government websites, supplied intelligence, and brought down military systems. This, however, did not happen.

Digital assets and blockchain technology, according to Ukraine’s deputy minister for digital transformation Alexander Bornyakov, are intended to help reinvigorate the Ukrainian economy and bring all government activities online. He said the ministry’s objective, which began two years ago, is to “bring 100% of government services online and develop a digital state to make all government services transparent, easy to use, and convenient for Ukrainian residents.”

The minister of digital transformation and his staff assisted in the formulation of a law a year and a half ago to legitimise digital assets in the country and make Ukraine one of the most crypto-friendly countries in the world, including the creation of the e-hryvnia, a central bank digital currency.

With the Russian invasion, however, all of those plans were thrown out the window. Instead, the Ukrainian government sought to apply its expertise in cryptography and digital assets to aid the military effort. Bornyakov claims that after a few days of fighting, they decided to ask for cryptocurrency donations. “We decided we needed money to travel in [to the nation] on the second or third day because there was a difficulty with banking liquidity.”

Bornyakov also claims to have received a call from his boss, Mykhail Fedorov, the minister of digital transformation, who stated that they wanted to support the cash-strapped army and asked if they could put up a means for individuals to give crypto assets.

It wasn’t quite that straightforward, though. With increasing concerns about cryptocurrency theft (according to crypto analytics firm Chainalysis, $14 billion in cryptocurrency was stolen by scammers last year), the government sought to ensure that its funds were safe. It wants to be able to convert the assets into fiat currency as well. They went to Kuna, the country’s largest exchange. “When it comes to security, there’s a lot of nuance, because if you don’t safeguard your infrastructure, someone might hack you and steal all of your crypto… But it’s not only about security; it’s also about the capacity to exchange assets into various fiat currencies.