Ukraine To Issue NFTs To Fund War Effort

Ukraine’s government is to issue non-fungible tokens (NFT) in order to help fund its war effort against Russia, as it looks to build on a flood of anonymous cryptocurrency donations.

Mykhailo Fedorov, Ukraine’s vice-prime minister and minister of digital transformation, said on Twitter that the government would announce details of the plan “soon”.

The plan is the latest sign that Ukraine is embracing digital assets to fund its armed forces. The country last week raised more than £200 million from the sale of war bonds.

After the conflict began the government posted on social media a public appeal for crypto donations, along with the addresses of two wallets.

Fundraising

The wallets have to date received more than $50m (£38m) in donations of Bitcoin, Ethereum, Solana and Polkadot, according to blockchain analysis company Elliptic.

The latest move takes advantage of the public attention around NFTs, sales of which surged last year to reach some $40bn.

The collectible tokens are fixed on a blockchain and can be bought and sold as non-reproducible goods.

While they can represent ownership of a digital asset such as computer code or a digital image, they have no physical existence of their own.

The Ukrainian government had previously announced a plan to reward crypto donors with an airdrop, a free distribution of digital goods, to encourage donations.

But it cancelled those plans in favour of the NFT plan.

After careful consideration we decided to cancel airdrop. Every day there are more and more people willing to help Ukraine to fight back the agression. Instead, we will announce NFTs to support Ukrainian Armed Forces soon. We DO NOT HAVE any plans to issue any fungible tokens

— Mykhailo Fedorov (@FedorovMykhailo) March 3, 2022

Crypto donations

Ukraine has already spent some $14m in cryptocurrency to fund the war effort, Michael Chobanian, president of Ukraine’s Blockchain Association, told Coindesk TV last week.

Decentralised cryptocurrency exchange Uniswap has instituted a feature that allows listed tokens on its site to be swapped into ethereum and donated to Ukraine in a single transaction.

An NFT of a pixelated smoking man ewaring a blue bandanna and sunglasses from a popular collection called CryptoPunks, worth about $200,000, was donatd to Ukraine’s crypto wallet last week.

An organisation backed by Russian activist group Pussy Riot raised $6.6m by selling an NFT of the Ukrainian flag to a pool of donors.

Meanwhile, the EU is considering measures to ensure Russia does not use cryptocurrencies to circumvent economic sanctions, as the US and UK have also raised concerns that crypto could become a way of concealing funds moving in and out of Russia.