Following the anniversary of Russia’s invasion of Ukraine, CryptoSlate takes a closer look at the state of Ukraine’s blockchain industry.
- Between February 23, 2022 and February 23, 2023, $187 million in cryptocurrency donations were collected to help Ukrainian groups, according to Crystal Blockchain analysis.
- About a third, or about $62 million, came from a group called Aid for Ukraine. The group is a blockchain consortium consisting of Alex Bornyakov, current Ukrainian Deputy Minister for Digital Transformation, and Michael Chobanian, founder of Ukrainian cryptocurrency exchange Kuna. .io and Sergey Vasylchuck, founder of his staking platform Everstake.
In an exclusive interview with CryptoSlate, Alex Bornyakov discusses the many challenges facing the Ukrainian blockchain industry following the Russian invasion and how crypto is being used to aid the country’s defense efforts. talked.
“At the beginning of the war, many technology and IT companies not only donated money, but also put forward many ideas for how the developer team could help Ukraine.”
Borniakov’s role as Deputy Minister for Digital Transformation includes work between government and business, with a focus on the IT and blockchain sectors.
“I am in contact with many entrepreneurs and funds of companies, founders and owners on the one hand and policy makers on the other. I am also responsible for a project called Electronic Residency, a program that allows you to do business.
Bornyakov added that he is also advising the Ukrainian government on the introduction of CBDC. He believes the CBDC will be key in supporting Ukraine’s efforts to go fully digital.
“The goal of a CBDC is to make money flows more transparent and make money programmable, so that when government money is decentralized, it removes bureaucracy,” Bornyakov said. says.
“There is a new law signed by President Zelensky in April 2022 amending the tax code for CBDC to work. We are currently unable to do so as it would require changes to the taxation rules and legislation. Not only people, but also businesses will be able to use crypto and other means for their business.In terms of CBDC, we have recently completed a pilot project with a number of Ukrainian banks, and the results have been positive. .”
Ukraine’s main exchange Kuna under threat
However, according to Michael Chobanian, founder of Ukrainian cryptocurrency exchange Kuna.io, the newly proposed bill is insufficient to support the transition from fiat to cryptocurrency, and it will not be possible in the long term. could hurt the Ukrainian cryptocurrency exchange he founded in 2014.
During the first few days of the war, Kuna processed approximately $5 million in transactions per day, which were purely fiat-to-crypto. It has since stabilized at around $1.5 million per day, said Chovanian, adding that the main pairs are USDT/UAH and BTC/UAH.
March 2022, partnership Conversion of cryptocurrency donations made via Aid for Ukraine into fiat currency deposits at the National Bank of Ukraine, with FTX processing the SWIFT portion of the transaction between the new and defunct cryptocurrency exchanges FTX and Everstake supported to do
But with newly proposed changes at the policy level, Chobanian worries that exchanges like Kuna could suffer as the proposed law would not allow local exchanges to operate. increase.
“The government is still very centralized and inefficient,” Chobaniyan told CryptoSlate, adding that he believes current Ukrainian law will make fiat-to-crypto conversion more difficult.
Many Ukrainians now use small kiosks for cash-to-fiat cryptocurrency. This is a small over-the-counter exchange that charges a markup as high as 1.5%, which is three times the industry standard of 0.5%. But Chobanian hypothesizes that eventually some exchanges will start merging with banks as exchanges become more regulated around the world.
“I predict that traditional banks and exchanges will merge,” he said. “So either the exchange will buy the bank, or the bank will buy the software and an existing exchange like Binance or Kraken and he will combine them into one product. will be regulated,” Chobabian said.
The company did not give an exact launch date, but added that there are plans to bring Kuna to the European market.
With so many changes on the horizon and the war still in sight, tensions appear to be starting to rise within the Ukrainian blockchain industry. Cryptocurrencies are increasingly viewed by regulators, military and intelligence agencies as a potential threat to non-state adversaries, or at least adversaries.
With over $60 million in cryptocurrency donations to Ukraine through Aid for Ukraine since the start of the war, this year’s changes regulating CBDC, cryptocurrency and blockchain issuance will continue to play a role in Ukraine’s future. There is a possibility. Its role remains elusive.