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The war in Ukraine and resulting global outpouring of financial support for those fleeing the country has placed a spotlight on crypto philanthropy and the role cryptocurrency can play in supporting refugees. For some crypto holders who fled the country on short notice leaving everything behind, cryptocurrencies are now their only remaining assets that they are able to use in their new host countries. Ukrainians are not the only displaced people who have turned to crypto currencies to address the challenges of daily life.
In Lebanon, some refugees are using crypto to get paid by their employer, to send money to friends and family, and to save capital without complying with the rules of the Central Bank.
In Afghanistan, as the Taliban restricted bank account withdrawals, millions of Afghans struggled to pay for basic goods. Fereshteh Forough is CEO of Afghan coding academy Code to Inspire, from which 350 girls have graduated with the goal of starting tech careers that would put food on their tables. “The girls texted me that all of them had lost their jobs because of the Taliban’s policies,” Forough said. “And, as the sole breadwinners, their families were falling apart.” So Forough helped 100 girls through Code to Inspire to create Binance and Trust Wallet accounts to receive cryptocurrency as their payments and exchange their digital assets for fiat in a local crypto exchange.
Reading about these instances led me down a rabbit hole of understanding how cryptocurrency is being used by refugees, and I quickly learned that there is no single narrative here. It’s complex. This week’s Deepdive is a summary of what I’ve learned: how and why cryptocurrency is being used by some displaced people - and why we should be cautious about it.
As always, we’d love to know what you think and what you’re learning. Send us an email web3forgood@gmail.com to share.
Xx Abeera (& Sam)
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🌊 Deep Dive - Cryptocurrency for Refugees: Great Hopes & Deep Concerns
📣 Latest News
📚 What We’re Reading
Ukrainian refugee flees to Poland with $2,000 in bitcoin on a USB drive. “I couldn’t withdraw cash at all, because the queues to ATMs were so long, and I couldn’t wait that much time.”
Crypto-native fundraising takes off as the wealthy of Web3 choose to donate crypto instead of cash. Why? Tax incentives are a big part of it. (Read our Deep Dive on crypto philanthropy here).
$60,000 selling 5 singles and a music video as NFTs vs $300 from Spotify: for unsigned artists, NFTs provide an opportunity for young, diverse creators to make a living without a record label.
Could Seed Club, a DAO that builds and invests in communities, be the “Y Combinator For Web3?”
St. Jude Children's Research Hospital has received $1 million in digital currency donations in the last 9 months. ($)
According to ConsenSys CEO and Ethereum co-founder Joe Lubin, the transition to Ethereum 2.0 “will lay to rest Ethereum's carbon footprint problem, that all goes away.” Proof of Work, Proof of Stake, what’s the difference and why does it even matter? It’s all in the weeds of Ethereum 2.0.
🚀 Opportunities
Apply - Giga is hiring a Social Media and Website Manager (remote), who will be partially responsible for managing Patchwork Kingdoms NFT community.
Apply - Gitcoin DAO is hiring long-term roles and short-term projects (remote).
Apply - Meta Angels is hiring a Social Media Manager, Partnership & Programming Lead, and Operations Manager (remote).
Apply - Outliers is a 10-week, summer program to empower exceptional student builders in Crypto and Web3. Applications are due April 10.
Apply - The Voice NFT Residency Program helps creators from underrepresented and marginalized communities transform a body of work into an NFT collection.
Learn - Art and culture institutions can now apply to We Are Museums WAC Fellowship Program, an eight week “immersive educational experience in all things Web3.”
Attend - We3, a web3 professional network for women and non-binary individuals, is hosting dinner parties in 18 cities this spring.
📡 On Our Radar
Proof Of Integrity is a decentralized and non-profit protocol to certify who is in need of Universal Basic Income.
JournoDao is harnessing the Web3 revolution to revitalize journalism.
Black@ is building a token-gated community of Black creatives, investors, and entrepreneurs.
STEWARD is a Web3 Collective working for people & planet.
🌊 Cryptocurrency for Refugees: Great Hopes & Deep Concerns
Over 2 million Ukrainains have fled into Europe and other countries due to the current Russian invasion. However, with Ukraine being the fourth most crypto-friendly country in the world in terms of per capita ownership, some of those who fled were able to take advantage of an asset that could go with them.
According to Alex Gladstein, Chief Strategy Officer at the Human Rights Foundation, “Never before in history have we had an asset like that. It’s like gold. You can have your savings in something where you just have to memorise or write down on paper the private key, and that’s really powerful," Gladstein said. "I’ve interviewed lots of people from Argentina and Afghanistan who’ve left their country with their value because of the power of bitcoin. It’s a tremendous humanitarian tool."
Another point to note is that over $63.8 million in donations have been funnelled to Ukraine since the start of the invasion, and this number is expected to hit $100 million soon.
There is much hype around cryptocurrency and the support it can provide refugees, because cryptocurrencies are stored on a blockchain. A blockchain is a system that allows two parties to do business without the need for a trusted third party; this can include a monetary transfer, ID, health records, and more. An identical record of all messages on a blockchain is available to every participant on the blockchain, which could be many thousands or more. Because there are so many copies of the data on the blockchain network, it’s nearly impossible for a would-be attacker to alter records or falsify transactions. That makes blockchain much more secure than other traditional, centralised systems.
Why is this a system that can help refugees?
It allows them to remain anonymous: Refugees who have fled conflict zones, and blockchains need to ensure that personal information cannot be used against them. As an example, the World Food Programme allows people to issue an encrypted ID or code number to distinguish them from others, without revealing their true identities.
Executive Director of ID2020 Dakota Gruener has stated, “Those who advocate for using blockchain technology for identity management say the approach would have several advantages. First, it would likely be far more secure than even the best-protected central database. Second, it allows for individual records to be held outside of national databases, which is better suited to a world with nearly 60 million forcibly displaced individuals and another 10 million stateless. And third, it would place ownership of an individual’s data in their own hands rather than those of a potentially unreliable or untrustworthy government’.
It allows refugees to digitise identity and other essential documents:
Home countries for refugees often have scattered analog records or haphazard digital ones, lost in the madness or abandoned. The Norwegian Refugee Council noted that 70% of Syrian refugees lacked basic IDs.
On a blockchain, this data can be stored safely, allowing refugees to export everything from their credit rating to their health data in an accessible manner. This can help immigration authorities in safe third countries vet applicants better and will allow for a more easily managed and smooth refugee process when crisis strikes.
For example, Bitnation is a blockchain startup helping refugees to obtain digital ID documents, which host governments can use to verify their identity. To build trust in the blockchain identity, the service verifies a person’s multiple social media accounts and links them to their social security number, passport, and other documents.
It provides a way to deal with inefficient financial systems in host countries: Mexico, which hosts many Central American asylum seekers, is a society run on cash. Credit cards are not accepted in small shops, and when they are, exorbitant fees often apply, ranging upwards of 10%. Remittance fees for international transfers range as high as 6% for traditional providers like Western Union, meaning that for every $500 sent, $30 is lost to an intermediary.
Blockchain and cryptocurrency technologies that reduce transaction fees for cross-border payments (while being stable to volatility) can help by reducing costs for refugees sending remittance payments back, and by making it possible for people to donate directly to charities working on the ground.
It allows donations to be tracked and increases accountability: Blockchain can help track where donations are going and help give donors the transparency needed to make sure they are comfortable donating.
Organisations like GiveTrack are already using bitcoin to help facilitate donations. Built by BitGive, the first 501(c)(3) nonprofit for bitcoin donations, GiveTrack aims to use blockchain to make the end uses of their donations more transparent to donors. This ensures that donations are transparent, verifiable, and making the most impact possible.
The United Nations World Food Programme (WFP) has directed resources to thousands of Syrian refugees in one of the largest-ever implementations of the Ethereum blockchain for a charitable cause. It gave refugees cryptocurrency-based vouchers that could be redeemed in participating markets, which sped up transactions while lowering the chance of fraud or data mismanagement.
The codes of cryptographically unique coupons representing an undisclosed number of Jordanian dinars will be sent to dozens of shops in five refugee camps across the nation. Using eye-scanning hardware to verify the user’s identity, multiple cashiers at each of the shops will then use blockchain technology to redeem the vouchers at the point of checkout.
It makes integrations more efficient: The immigration system can be made more efficient by blockchain. Digital cash can help new refugees adjust rapidly to their new home and have the economic security to integrate. Blockchain can be used to track courses new immigrants take, and resources they need. Finland, for example, gives refugees pre-authorized digital cards that are linked to the blockchain, integrating financial resources and identification together.
The Finnish Immigration Service Migri first partnered with Helsinki-based startup MONI back in 2015, as part of a pilot project that offered refugees a prepaid Mastercard linked to their digital identity. Blockchain technology, deployed via Ethereum, maintains a record of the financial transactions made with the card. This makes it easier for refugees to find employment and receive money from jobs, and also allows them to pay bills electronically - ultimately speeding up their process of becoming established in Finland. It's thought that there are now thousands of MONI users among Finland's refugee community. While there are privacy concerns, the system is voluntary and Migri has shared that all identities are kept private.
While there is great promise for cryptocurrencies to support refugees, it also comes with its own set of concerns. Digital identities and mobile phones can be used by authorities to increase surveillance over refugees. Authoritarian states can use this data against them, and even in democratic countries, there are debates about mass manipulation through fake news, interference in democratic elections, and the use of search engine algorithms to offer people tailored search results or expose them to different advertisements based on their preferences and choices.
Cryptocurrencies are also highly volatile, in fact ten times more volatile than major currencies. This means that if migrants were to use such channels, they would be exposing themselves to extreme risks. But more importantly users of bitcoin may find themselves victims of speculative attacks, as the cryptocurrencies’ value remains completely speculatively constructed. Crypto is also just generally not completely understood by the general public. Not every individual knows how to set up a digital wallet, and the unfamiliar can seem scary hence, there is a need to educate and set up regulations that encourage positive use.
Another thing to consider is that while refugees can benefit from cryptocurrencies, it can be used by the other side as well. Russian elite have been converting their wealth to cryptocurrencies as a way to evade economic sanctions, and Senator Elizabeth Warren has introduced a bill that would give the US government the authority to ban US companies from processing cryptocurrency transactions connected to sanctioned Russian accounts and to apply secondary sanctions to foreign cryptocurrency exchanges doing business with sanctioned Russian individuals, companies or government agencies.
This is an unprecedented time of unrest and movement of peoples in need, and there is no silver bullet to a complex, multifaceted problem like the refugee crisis. However, it is worth exploring how individuals who have been forced to flee away from everything they know can be supported, and provide the tools to be able to start again.
