The Open Dialogue Foundation (ODF) was invited to the May 2023 Digital Currency Conference (DCC) in Mexico City, a high-profile gathering for central bankers, bankers, and the financial services industry, to discuss the role of digital currency in times of crisis and humanitarian aid. ODF’s Chief Advocacy Officer, Katarzyna Szczypska, argued in her closing keynote that Bitcoin is the humanitarian currency of choice.Download presentation
Using Russia’s recent invasion of Ukraine as an example, Szczypska demonstrated how Bitcoin has helped vulnerable populations across the conflict spectrum: human rights groups delivering humanitarian assistance, Ukrainian refugees, Ukrainian citizens, and ordinary Russians. The speech sparked discussion and surprised some central bank representatives who acknowledged that they previously failed to consider Bitcoin as a humanitarian technology. ODF finds encouragement in this response to continue its mission of showcasing to decision-makers how the technology is used by human rights defenders and victims of repression to ensure freedom (see more about our #BTChance coalition here).
The Digital Currency Conference, an extension of the Currency Conference inaugurated in 1992, has boasted an annual attendance of more than 600 delegates from over 50 countries. Its latest edition focused on stakeholders of the central bank and the private sector side engaged in designing Central Bank Digital Currencies (CBDS). Szczypska opened her speech with polling the audience on its stance on Bitcoin. While most of the audience did not think of Bitcoin as a useless technology, a large majority of listeners raised their hands after being asked if Bitcoin is just a speculative asset. Indeed, many legislators fear that Bitcoin is an environmentally wasteful technology used by scheming individuals and businesses to ‘get rich quick’ or for criminal activity. However, as Szczypska noted, criticisms of Bitcoin usually stem from people who have the luxury of living in countries with relatively stable financial systems. In countries where citizens lack access to bank accounts or face political persecution, Bitcoin proves essential to protect rights.
More importantly, Bitcoin has saved lives in times of war. Russia’s aggression towards Ukraine serves as a valuable example of how Bitcoin is used to transfer life-saving equipment to subjugated populations. When the payments and financial infrastructure collapsed after Russia’s invasion, ODF was able to secure the purchase of vital items through Bitcoin and send the first 100 bulletproof vests and helmets to Ukraine–all within the first 48 hours. “If we used the traditional financial system, it was going to take days”, said Szczypska, pointing out that while banking systems take three days to process payments, it takes 10 minutes for a Bitcoin block to close. “This speed means lives were saved”, remarked Szczypska.
In war, time matters more than ever. It takes 10 minutes for a Bitcoin block to close and it takes about three days to do the same thing through the banking system. That speed means lives are saved.
To date, ODF has delivered more than 72,000 pieces of protective equipment to Ukraine, worth around €7 million. For the Ukrainian government, it was many more thousands of bulletproof vests, helmets, night-vision goggles, and large quantities of medicine and other aid that were bought from the funds raised from the Crypto Fund of Ukraine. The fundraiser that was an effect of cooperation between the Ukrainian government and local fintech, including Michael Chobanian from Kuna exchange, raised $20 million in less than two days. Assistance began coming in through Bitcoin and other cryptocurrencies from individuals worldwide before any foreign aid. Furthermore, in the first month, the crypto fund was the biggest donor to Ukraine, bigger than the US, EU or UN.
Szczypska also explained how Ukrainian refugees used Bitcoin to fund their escape during Russia’s military invasion. As millions of Ukrainians were forced to flee their homes, they needed to bring their savings with them, but struggled to access the money needed to evacuate their country and survive in a new place. “Our team at the Open Dialogue Foundation has helped over 12,000 people to find a temporary home in Poland or relocate to other EU countries,” said Szczypska. Bitcoin now makes it possible for refugees to quickly access funds with savings accessed anywhere with the use of a password, making it a lot easier to move around and a lot harder to steal than cash. “This is truly revolutionary. Unlike people who fled Holocaust or even disasters just over a decade ago, people today have a new technology that allows to bring your wealth with you. Your live assets in your mind. Think about that”, asserted Szczypska.
Ukrainians are not the only ones suffering financially from the war; everyday Russians are hurting too. Western sanctions and Russian counter-sanctions are denying 144 million Russians financial independence. In her speech, Szczypska observed that “there is no major economy in the world that has ever been unplugged from the global market the way that Russia has”. Like with Ukrainian refugees, Bitcoin offers a decentralised financial system that Russians can use to survive. They can send money to and receive money from family members abroad, escaping sanctions for a war they have no part in. By using Bitcoin to assist family members, Russians can evade the Kremlin’s Financial Security Service (FSB), which tracks for such transactions. “And Bitcoin’s inherent non-discriminatory nature, the technology is nationality-agnostic, it doesn’t distinguish Russian passports from Ukrainian ones, aligns perfectly with the universality of human rights” – Szczypska noted.
For many people across the globe, Bitcoin is a human rights tool, providing ways to regain financial freedom. And there is no personal freedom without financial freedom.
Importantly, as argued by Szczypska, in all of the cases mentioned, Bitcoin was essentially a last resort – a means of defending against financial exclusion and censorship and protecting rights when the existing financial system was failing or under authoritarian grip. ODF’s example is a good case in point. The Foundation has fallen victim to the overregulation of the existing financial system, which remains vulnerable political manipulation on the part of oppressive regimes. In 2019, all of ODF’s and its executives’ bank accounts in Belgium were closed with no explanation and no possibility to seek recourse. As Szczypska remarked, “all it took to be banished from a banking system of a Western democracy… was negative media coverage orchestrated by the authoritarian or hybrid regimes which we have criticized for the abuse of human rights and the rule of law”. This smear content was then picked up by automated systems that banks rely on for compliance with anti-money laundering and counter-financing of terrorism rules (AML/CFT), leading to the closure of ODF accounts. Thus, when ODF was blocked again by crowdfunding platforms after the Russian invasion, and with traditional banking being paralyzed, the Foundation’s team understood Bitcoin’s value for providing humanitarian assistance to Ukraine.
ODF is only one example of the countless stories of politically-motivated de-risking (for more cases see here). This made ODF start an advocacy mission focused on showing decision-makers how traditional banking system is weaponised by oppressive countries such as Russia, Kazakhstan, Turkey, Venezuela to retaliate against the civil society, and how assets such as Bitcoin are utalised by victims to defend against political opression and secure rights. As Szczypska reminded listeners, “while for some Bitcoin might engender greed and other unsavory aspects of human nature, for many people it’s a human rights tool, providing ways to regain financial freedom, and there is no personal freedom without financial freedom”.