Notes

War bonds, NFTs , and crypto How Ukraine can finance its defense

The central point of the most recent initiative to raise money for Ukraine was a basic office that was located above a bakery in north London.

Isaac Kamlish (ages 23-25), Nathan Cohen (ages 25-26) Isaac Kamlish (ages 23-25), Nathan Cohen (ages 25-26) and Isaac Bentata (ages 23-26) were gathered at their computers earlier in the week and helped launch the first-ever national government auction, a one-of-a-kind digital collectibles.
Kyiv raised $600,000 for its defence against Russia using the technology of the three.
The auction used blockchain technology to create funds for wartime. This highlights the fact that the Ukrainian government is using both traditional as well as new tools to get the cash it requires to stay afloat in the current economic crisis.
NFT that was financed by an individual from Pussy Riot, which raises $6.7million to Ukraine

Old school is a playbook. Kyiv has brought in around $1 billion in war bonds, which were sold to private individuals and institutions in Ukraine. It's due to the fact that residents are willing to lend money to the government even knowing that they might not receive all their money back.
The President Volodymyr Zelensky's Administration has urged potential donors from across the world, encouraging the transfer of cryptocurrency directly. According to Chainalysis this initiative has raised more that $56 million. Collectors from Los Angeles, Barcelona and other cities rushed to purchase NFTs on Wednesday. They considered it an important moment for both the crypto world and Ukraine.
"The Ukraine war was devastating and it will be remembered forever," stated Ben Jacobs, cofounder of Scenius Kapital which is a digital asset investment company. "This use crypto technology is also historic in its own right."
Jacobs, who is located in Venice Beach (California), purchased two NFTs. The total cost was $1,100 and includes small fees. The Ukrainian government took home around 1,000 in Ethereum, which is the cryptocurrency commonly used for NFTs's sales.
A fundraising rush
People from both Europe as well as the United States have been showing solidarity with Ukraine by hanging flags in yellow or blue on buildings, hosting local fundraising events, and updating avatars on social media.
Zelensky's team requires more than just gestures and words. To keep Ukraine's government running and equip its military, Kyiv requires cash -and lots of it. It has estimated that war could cost the country $565 billion. The country's GDP in 2020 was $155 Billion.
"Our fiscal gap is much greater than we had anticipated when we started this year," Yuriy Butsa, Ukraine's public debt commissioner management said to CNN Business, referring to the gap between the government's revenue and spending.
The federal government has taken unprecedented actions to help close the gap between Russia and China within the last five weeks since the Russian invasion.
Viktor Szabo (a fund manager at Abrdn which is a British-based investment company) said that "these guys are being creative."
A man wearing a ribbon with the colors of the Ukrainian flag is seen using an iPhone in Barcelona and Mar. 1.

Kyiv has turned to tried and reliable methods to raise funds. Around $4 billion in emergency financing from multilateral institutions, such as the International Monetary Fund and World Bank is already received by Ukraine and an additional $2 billion is under negotiation.
It also makes use of traditional war bonds. These are bonds issued by governments during conflicts to boost funds for. They are useful to combat inflation as they keep cash out circulation during times of typically a shortage.
Five local currency bond sales in March have helped Ukraine raise approximately $1 billion. Butsa stated that there was a huge demand from both individuals and institutional customers. The government gets the proceeds and uses them to fund expenses like pensions or emergency services.
Butsa stated that there are many people who invest $10,000 or $5,000 of this instrument.
Purchasing these bonds in the current climate requires a leap of faith. One-year notes issued last month had a yield at 11 percent. This is an extremely high risk level. It is not possible to guarantee repayment in the event that Zelensky's government collapses or is removed or the economy of Ukraine is devastated by a long-running conflict.
S&P Global Ratings reduced its rating of Ukraine's credit soon following the war. https://cryptoblogstar.com/ stated that although the international community has been expected to assist Ukraine with its financial requirements over 12 months, there is still the possibility of "governance interruptions" which could lead to commercial debt servicing becoming at risk.
Butsa stated that the government of Ukraine works "24/7" together with its bankers, to develop a dollar bond that can be sold to investors from abroad. Although many are eager to help, they are hindered by capital controls that prevents them from collecting any money in Ukraine's currency.
"Our goal is to provide an instrument through which any person who wishes to support Ukraine sitting in [the] US and has an account with the local banks, can easily contribute to us," Butsa said. Butsa's team is looking at options within the European Union.
Despite the fact that there is support for Ukraine professionals who have obligations to safeguard their clients' capital may be hesitant about lending money to the government of Ukraine, even if they can offer bonds in other countries.
Szabo said that "we cannot invest in an asset that we can see a high likelihood of that money being returned," although he did add that he thought the market might be more appealing once the war is over.
Cryptography: Working the angle
Financing options that don't involve borrowing are appealing too because Ukraine is wary of drastically expanding its debt burden.
Butsa said that they aren't looking "to end up" spending more on the debt service when the war progresses to the reconstruction phase.
That's where donations to crypto and NFT sales can be found. Ukraine has been encouraging citizens, for many weeks, to transfer bitcoins or any other crypto currencies to official social network accounts. The Ukrainian government has access to huge number of small donors that do not need to worry about the conversion of currency or intricate financial agreements.
As of March 28 Kyiv had raised roughly $56 million in crypto with an average donation of $30, Chainalysis told CNN Business. Alex Bornyakov (Ukraine's deputy minister for digital transformation), stated last month the money was used to purchase helmets and vests with bulletproof protection as well as walkie-talkies and medicine.
As part of a vigil for Russian aggression in Ukraine protesters stand in front of the massive Ukrainian flag in front of the White House. This was on February 24 of 2018.

An NFT of the Ukrainian flag was auctioned off by UkraineDAO. The idea was supported by a member to the Russian activist group Pussy Riot. This sale raised over $6.7million .
This week, the first official NFT Auction marked a new phase in the campaign. The auction featured digital images produced by local artists and combining vibrant images with wartime artifacts like tweets which were purchased by supporters from all over the world.
Kevin Lista Navarro, a 26-year-old financial advisor in Barcelona, previously donated to help refugees from Ukraine. Still, he thought of the NFT auction as a unique opportunity, and bought two.
"Thanks to this new technology, you can now have the opportunity to give back to the cause and also receive in return a commemorative piece of art," he said. It is possible that they will be valuable in the future.
After sending cold emails to representatives of the Ukrainian government, Kamlish Cohen, and Bentata (the London team whose the nascent platform FAIR.xyz was used in the sale), Bentata, Cohen and Cohen were given the opportunity to work. They've been involved in the project's launch for two and a quarter months, pulling late hours and working on adrenaline.
Bentata added, "It has been really insane."
Kamlish said that the process went smoothly, despite heavy website traffic that could be due to malicious actors.
Jacobs Scenius Capital, said that Ukraine has really turned to crypto to gain financial backing... This demonstrates how important it is for governments to consider investing in crypto technology as well as NFT technology as opposed to protesting against them because it is unfamiliar and frightening."

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