Ukrainian Deputy Prime Minister and Minister of Digital Transformation Mykhailo Fedorov said that over two days, total donations to the Armed Forces of Ukraine in cryptocurrency amounted to $12.7 million.
"Total donations to the Armed Forces of Ukraine in cryptocurrency have grown to $12.7 million in just two days," Fedorov wrote on his Telegram channel.
According to him, most of all are transferred in: Ethereum – $5.5 million, Bitcoin – $4.4 million, and Tether – $2.1 million.
Donations, including those made with cryptocurrencies, have been pouring into Ukraine since the start of the Russian invasion, launched on Thursday.
For months, Ukrainian leaders have been making concerted efforts to turn the country into a new crypto haven. Last Thursday, the Ukrainian parliament passed a bill to legalize cryptocurrencies, building on a similar effort made in September before it was vetoed by President Volodymyr Zelensky.
He argued that the country couldn’t afford to create a new regulatory system for digital assets. However, Ukraine’s central bank has been working on a central bank digital currency since 2017, most recently announcing a test using the Stellar blockchain. The pilot was designed to integrate some of the lessons from decentralized finance into a centralized initative.
Separately Sunday, Ukrainian Minister of Digital Transformation Mykhailo Fedorov called on major crypto exchanges to block payments to Russian users.
“It’s crucial to freeze not only the addresses linked to Russian and Belarusian politicians but also to sabotage ordinary users,” Fedorov tweeted.
An increased reliance on cryptocurrency will be an inevitable avenue for Russia to try to prop up its financial transactions, but it is unlikely to serve as a substitute for corporate transactions over time.
While about 80% of Russia’s financial transactions in the past have been done with the dollar, federal law enforcement and Treasury officials are stepping up efforts to “aggressively combat” the misuse of cryptocurrency to evade sanctions, according to a White House official who was not authorized to comment publicly and spoke on the condition of anonymity.
The official would not comment on whether the Biden administration is weighing targeting Russia-based crypto exchanges for sanctions.
The administration has experience regulating Russian crypto business. Earlier this year, Treasury sanctioned Russia-based SUEX and 25 affiliated cryptocurrency businesses, blacklisting the exchange from the dollar financial system, for allegedly helping criminal hackers clean and cash out their loot. It was the first crypto business to receive that designation.
