Donations made in cryptocurrency are proving to be a fast and far-reaching means of providing financial relief in times of crisis, according to multiple industry players.
This has proven to be the case after devastating earthquakes it hit parts of Turkey and Syria in February. Blockchain analysis company Chainalysis Dear All that about $5.9 million in donations have been made to support relief efforts in the region in the month since the natural disaster struck.
The likes of the Turkish Interior Ministry's earthquake relief campaign, the Turkish Red Crescent, Save the Children, and Project Hope have all received cryptocurrency-based donations. Additionally, various cryptocurrency exchanges, including Binance, Tether, Bitfinex, OKX, and KuCoin, donated more than $9 million to support victims in the area.
Cointelegraph contacted Chainalysis to unpack the methodology used to monitor cryptocurrency-based donations supporting disaster relief efforts in Turkey and Syria.
Chainalysis research director Kim Grauer said the firm uses a combination of human intelligence collected by its experts and proprietary heuristics to identify and monitor flows to cryptocurrency services. This includes organizations that accept donations, as well as scams that have sought to divert donations from unwitting supporters.
Grauer believes that the speed of transactions and the global nature of cryptocurrency transactions are proving to be an important means of providing rapid monetary support in times of crisis:
โCryptocurrency is cross-border, instant, and liquid, making it an ideal technology for raising funds and getting them where they are needed most quickly.โ
Grauer also points to the ability to accurately monitor blockchain data as another strong argument for cryptocurrency's usefulness in facilitating donations and support after major disasters and emergencies:
โBlockchain transparency is a unique benefit for cryptocurrencies as it provides opportunities to help organizations track donations and law enforcement agencies to identify and track illegitimate schemes trying to capitalize in times of crisis."
Antonia Roupell, Web3 COO at Save the Children, tells Cointelegraph that the organization first accepted Bitcoin as a donation method in response to Typhoon Haiyan that devastated the Philippines in 2013. As of 2020, the charity has raised USD 7.4 million in cryptocurrency donations.
Related: Ukraine Got $70 Million In Crypto Donations Since The Start Of The Conflict With Russia
This has continued during the organization's earthquake relief work in Turkey and Syria. Roupell highlights a number of benefits of cryptocurrency-based donations compared to fiat-based donations.
"The vast majority of our cryptocurrency donors are first-time donors to Save the Children, so cryptocurrency has allowed us to tap into a new and growing fan base."
The Blockchain functionality also drives recurring donations, according to Roupell. In 2021, Save the Children received a number of Ethereum donations from NFT sales, some of which encoded future donations via specific NFTs' smart contract functionality.
Roupell also highlights the US tax benefits for donating cryptocurrency to charity, which has led to an increase in year-end donations. He also points out that crypto donations are, on average, significantly higher than fiat donations.
While he highlighted the positives, Roupell said one drawback was the anonymity of most cryptocurrency donors, which rules out the possibility of thanking benefactors for their contributions.
Roupell believes that there is great value in facilitating blockchain-based solutions and supporting relief efforts around the world and that humanitarian organizations will have an increasingly important role to play in integrating and expanding access at the global level. basic:
โCryptocurrency is a great donation vehicle, but the underlying technology, peer-to-peer electronic cash, is truly revolutionary for economic inclusion.โ
The charity supports a variety of cryptocurrencies that are accepted by The Giving Block cryptocurrency donation platform, while Roupell said the organization โdoes not endorse, promote, or judgeโ any specific token. It also accepts fiat currencies and global stocks, with a priority to raise urgent funds to support global humanitarian responses.
Post navigation
