How Сan Cryptocurrencies Help In a Crisis?

(Last Updated On: November 16, 2023)

It only takes a few minutes of watching the news coverage to realize that the world is currently facing multiple humanitarian crises. In an unexpected turn, cryptocurrency has begun to play an increasingly important role in humanitarian aid.  Now, let’s explore why and how crypto has been employed to relieve people’s suffering in crisis-stricken countries.

What is a humanitarian crisis?

A humanitarian crisis is a single or a series of events that threaten a large group of people’s health, safety, or well-being. These crises can be short or long-term, and due to their complex nature, it can be challenging to pinpoint what ignited the crisis. What all the different types of humanitarian crises have in common is that people suffer because of them.

What are the types of humanitarian crises?

1. Conflicts: Wars often result in a humanitarian crisis. People are forced to flee their homes, civilians are directly or indirectly targeted by the military, and essential public services are disrupted.
2. Pandemics: The spread of disease can decimate communities and even entire countries.
3. Natural Disasters: Fires, floods, and earthquakes.
4. Famines: Environmental, economic, and political factors can often lead to people going hungry.

However, cryptocurrency can play a role in helping vulnerable people in these tragic circumstances.

How can cryptocurrencies help in critical periods?

Bitcoin (BTC) has changed cross-border finance forever. Its launch in 2009 made transferring value worldwide in seconds possible without relying on banks and financial institutions.

In a crisis, people need money to cover the cost of their basic needs. However, banks are often overwhelmed as people rush to withdraw their money, or they aren’t capable of functioning during war and disaster. Therefore, cryptocurrencies have filled the gap left by banks and offer an alternative way of getting financial aid to people.

1. Help with crypto: Crypto Donations

Firstly, major charities that respond to humanitarian crises worldwide have started warming up to crypto. They now accept BTC, ETH, and stablecoins. Generally, charities use crypto because it’s fast, borderless, and offers tax breaks.

UNICEF

The United Nations Children’s Fund (UNCEF) was born out of the ashes of World War II and became one of the world’s most reputable charitable organizations.

UNICEF has a presence in 192 countries and is involved in various charitable operations, including:

• HIV treatment
• Nutrition Programs
• Education
• Emergency disaster relief

UNICEF saw an opportunity to increase its funding using crypto and opened a CryptoFund in 2019. According to the UNICEF website, accepting donations in BTC and ETH allows sending funds to UNICEF quickly and transparently. UNICEF uses the CryptoFund to invest in companies developing open-source solutions to the most critical challenges facing children and young people worldwide.

One of the projects is improving food and vaccine distribution using blockchain technology in India. The project has received 43 ETH ($ 125,000) in donations.

Moreover, one of the most significant donations made into the UNICEF CryptoFund was around $350,000. Huobi Global crypto exchange sent this donation in BTC.

Save the Children

Save the Children turned 100 years old in 2019 and has spent the last century committed to improving the lives of children worldwide suffering due to famine, war, and natural disasters. In 2013 Save the Children started accepting Bitcoin donations to help it respond to the devastation left behind by Typhoon Haiyan in the Philippines.

According to the Save the Children’s website, the partly crypto-funded response to the crisis in the Philippines was the first time in history that an INGO (international non-governmental organization) accepted Bitcoin. Save the Children accepts over 60 cryptocurrencies, including BTC, ETH, and USDC, because they offer a fast, secure, and low-tax alternative to fiat donations.

Food For Life Global

Food for Life Global is a food relief organization that provides millions of free plant-based meals to people all over the world every year. The organization accepts crypto for tax reasons and because of its speed and efficiency. You can donate to the charity in dozens of different coins including, BTC, ETH and USDC.

2. Help with crypto: Safer International Money Transfers

Secondly, cryptocurrency technology has dozens of use cases, but the most mentioned is its use as an alternative to traditional international money transfers. The advantages of using crypto to make transfers are:

1. Lighting Speed: Transaction speeds on some networks such as Tether USDT are very high and happen in real-time.
2. Keeping Costs Low: Banks often charge high fees for international transfers; crypto provides a cheaper alternative.
3. Reducing Fraud Risk: Cryptocurrencies are transferred on decentralized networks, which means hackers can’t target a single central server to interfere with payments.
4. Helping Poorly Baked States: According to the World Economic Forum, over 50% of people in the developing world are unbanked; crypto can connect these people to the financial system.

3. Help with crypto: Stablecoins Ensuring Your Funds Stability

Finally, stablecoins are also a way to stabilize the influence of economic situation on your assets. They are pegged by fiat currencies or any other mean that would make the price of a coin stable. Therefore, stablecoins will prevent you from volatility in uncertainty times. Hence, you won’t loose your funds due to severe market fluctuations. Moreover, it is also a good option to donate directly in stablecoins. If you’re looking to donate in stablecoins, here are your best options:

• USD Coin (USDC)Tether (USDT)
• Binance USD (BUSD)
• Dai (DAI)

If you plan to make a donation to a charity in crypto, you’ll first need to hold the tokens accepted by your chosen organization – Swapzone can help you out with this.

Help with crypto: How to donate cryptocurrency?

The organizations mentioned in this article have dedicated crypto donation pages to find the wallet address where they receive crypto donations.

Let’s say you want to donate $1,000 in USDC because you know that a stablecoin will keep its value. However, you currently only hold BTC in your wallet; luckily, Swapzone can help you convert your BTC into USDC at the best possible rate.

How to convert BTC to USDC?

1. Search: Visit the Swapzone website.
2. Pairs: Select BTC under the ‘Send’ box and select USDC in the “Get Up To” row.
3. Amount: Enter the amount of BTC needed to receive, e. g. $1000 USDC and press exchange.
4. Exchange: Enter your wallet address and email (optional) and proceed with the exchange.
5. Donate: Congratulations, you exchanged BTC for USDC at the best market rate, and you can now send your crypto to your chosen charity.