Crypto Kyiv: NFTs funding the War in Ukraine

Ukraine's government has announced it will print a range of Non Fungible Tokens to defend the country against the Russian invasion.

Josh Watson
22nd March 2022
Credits: Wikimedia Commons
Forget war bonds, Ukraine’s government has taken collecting money for its army into the 21st century with its most recent plans to print a range of NFTs to raise money to fight off the Russian invasion. Is this a valid use of NFT? NFT correspondent Joshua Watson is back at it to see what is going on in the world of digital apes this time.

On the heels of WWF’s attempt to raise money for charity, the Ukrainian government is at it as well. In a tweet on the 3rd of march, Mykhailo Fedorov – the vice prime minister and minister of transformation of Ukraine – that ‘’ we will announce NFTs to support Ukrainian Armed Forces soon. We DO NOT HAVE any plans to issue any fungible tokens’’. While the £200 million from the sale of war bonds is by far the biggest contribution to the budget so far, these NFTs alongside a single over $3 million donations in bitcoin to leading NGOs have many people’s attention.

And there is good reason to use crypto in this way. One of the major advantages is its anonymity, allowing you to give money to the Ukrainian government without your own government tracking you down (as easily anyway). Say you were a relatively wealthy Russian and support Ukraine; this gives you the perfect way of supporting the enemy of your government. NFTs on the other hand lack this aspect, the main purpose of an NFT is to get the image as proof of purchase, it is all about proof of ownership!

Once again, we get on to the list of issues with NFTs – Energy consumption, money laundering being chief among them – however, it seems there has not been the same public backlash we have seen when NGOs used them as money-raising opportunities, suggesting that war is a good reason to print NFTS. Regardless, I am concerned about how the government will get the money out of these NFTs. The cryptocurrency that is used to purchase these images can be hard to obtain, requiring someone else to buy it off them in exchange for a ‘real’ currency. This process can take quite a while – pay-outs for NFT sales taking weeks or months compared to the brief time in truncations for bounds. While this crypto is still an asset to loan with, many larger organizations will not accept it, making it harder to have real cash with you would think. You cannot buy guns and ammunition or pay soldiers with ape pictures or online Disney bucks

And it is not like all the cypobros are on the same side here. Cryptocurrencies giants, such as Binance and Coinbase, have carried on trading in Russia – showing no sign of halting sales or restricting use for individuals facing international sanctions. This alongside a rampant increase in the use of cryptocurrency by Russians due to the falling value of the Rubal, which has been the laughingstock of the internet may lead to being a larger part of this war than we thought.

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