Cryptocurrency donations are proving to be a quick and far-reaching way to provide financial assistance in times of crisis, according to several industry stakeholders.
This has proven to be the case after devastating earthquakes hit parts of Turkey and Syria in February. Blockchain analytics firm Chainalysis estimates that around $5.9 million of donations have been made to support relief efforts in the region in the month since the natural disaster took place.
The humanitarian aid campaign for the earthquake victims of the Ministry of the Interior of Turkey, the Turkish Red Crescent, rescue the children and the project hope to have received donations based on cryptocurrency. Additionally, a number of cryptocurrency trades, including Binance, Tether, Bitfinex, OKX, and KuCoin, gave over $9 million to support victims in the region.
Cointelegraph has been in touch with Chainalysis to analyze the methodology used to monitor crypto donations in support of disaster relief efforts in Turkey and Syria.
Chainalysis research manager kim grauer stated that the company uses a combination of human intelligence collected by its experts and heuristic owners to identify and monitor flows to cryptocurrency services. This includes organizations that accept donations and scams that have sought to misappropriate donations from unintentional supporters.
Grauer believes that the speed of transactions and global nature of cryptocurrency transactions are proving to be an important means of providing quick monetary support during times of crisis:
“Cryptocurrency is cross-border, instantaneous, and liquid, making it an ideal technology for raising funds and getting them to where they are needed most quickly.”
Grauer also emphasizes the ability to accurately monitor blockchain data as another strong argument for the usefulness of cryptocurrencies in facilitating donations and support in the aftermath of disasters and major emergencies:
Blockchain transparency is a single advantage for cryptocurrencies, provide opportunities for charities to track donations and law enforcement to identify and trace illegitimate schemes to capitalize during a crisis."
Antonia Roupell, Web3 operations are under the direction of Save the Children, Cointelegraph said that the organization initially accepted Bitcoin as a donation method in response to Typhoon Haiyan that devastated the Philippines in 2013. Starting in 2020, the charity raised $7.4 million in gifts of cryptocurrencies.
Related: Ukraine has raised 70 million dollars in crypto donations since the beginning of the conflict in Russia.
This went on during ISIS's relief operations in Turkey and Syria. Roupell noted a number of advantages of cryptography-based versus fiat-based donations.
“Most of our crypto donors are primary donors to Save the Children. Cryptography has opened up a new base of growing donors."
The Blockchain feature also feeds recurrent donations, says Roupell. In 2021, Save the Children received a number of donations from NFT sales, some of which coded future donations using some NFT's Smart Deal functionality.
Roupell also highlights tax benefits in the U.S. for cryptocurrency donations to charities, which resulted in an increase in donations at year-end. It also notes that crypto gifts are, on average, substantially higher than fiduciary gifts.
While stressing the positive aspects, Roupell said a disadvantage was the anonymity of most cryptocurrency donors, which excludes the ability to thank benefactors for their contributions.
Roupell believes there is great value in blockchain-based solutions facilitation and support aid efforts around the world and that humanitarian organizations will have an increasingly key role to play in integrating and scaling access at grassroots levels:
“Cryptocurrency is a great donation vehicle, but the underlying technology, peer-to-peer electronic cash, is truly revolutionary for economic inclusion.”
The charitable organization supports a variety of cryptocurrencies that are accepted by The Giving Block crypto donation platform, whereas Mr. Roupell stated that the organization is "not supportive, promoting or judging particular tokens. It also accepts global currencies and fiduciary shares, with a focus on raising urgently needed funds to support global humanitarian responses.