The censorship-resistant nature of digital assets has led to the layman associating them with illicit activities. However, this inability to be blocked also means that these assets can have massive benefits for the world’s most underprivileged.
Ever since its inception, cryptocurrency has been used by dissidents under oppressive regimes, political activists, and refugees. These convenient and neutral assets have helped millions of unbanked users gain access to the formal economy for the first time. Here are some of the ways cryptocurrencies and digital assets are having a positive impact on society.
Ukraine’s Current Use of Digital Assets
Perhaps the most pertinent example of cryptocurrency being used for good is at the center of the biggest land invasion in Europe since the Second World War. This week, Russian forces invaded Ukraine to “demilitarize” it. On the day of the attack, A Ukrainian military group raised $400,000 in Bitcoin donations. The group is called “Come Back Alive” and some users have already set up recurring monthly donations worth thousands of dollars.
Altogether, crypto donations to Ukraine have crossed $10 million. Fortunately, the government recognized the potential of cryptocurrency long before the invasion. Last week, regulators officially recognized Bitcoin as a legal asset within the mainstream economy. This was after data suggested that the volume of cryptocurrency trading within the local economy exceeded fiat trading.
Whether these donations go far enough to turn the tide remains to be seen. However, it does highlight the fact that a digital currency that is detached from any government control is a safe haven for nations suffering from armed conflict.
When the Taliban took control of Afghanistan’s governance last year, international pressure on the country’s economy was swiftly intensified. Popular money transfer services such as Western Union and SWIFT were suspended in the region, leaving ordinary Afghans blocked out from the global economy.
The situation has created a boom in cryptocurrency. According to data Chainalysis’ 2021 Crypto Adoption Index, the country surged to the 20th spot on their Bitcoin trading volume chart. While most users in the country are day-trading or using Decentralized Finance products to create capital gains, others rely on cryptocurrency payments for freelance gig work.
Cryptocurrency adoption has been swift which indicates the positive impact digital assets are having on this troubled economy.
Legal action is still prohibitively expensive. That means access to justice is often limited to individuals and corporations with the deepest pockets. Small businesses and ordinary households are reluctant to pursue lawsuits simply because of this cost and associated risk. Now, the combination of litigation finance and blockchain technology is solving this issue.
Geneva-based Liti Capital is raising funds on the blockchain by issuing wLITI tokens. These funds are then used to finance specific lawsuits. If the lawsuit is successful, the payout is distributed to token holders. If it’s unsuccessful, the risk and losses have been spread across the token holder community. In this way, blockchain technology is improving access to justice and bringing a new asset class to the masses.