Humanity First: Crypto in Times of Crisis

In April of this year, Binance Charity launched the first-of-its-kind Binance Refugee Card.

Read on to take a deeper look at how this card and crypto-based cash assistance have helped 15,000 Ukrainian refugees and internally displaced people.

Watch our video — Humanity First: Crypto in Times of Crisis

The war on Ukraine has seen the largest displacement of people in recent years. At least 12 million people have reportedly fled their homes since February 2022. 

Immediately after the outbreak of the war, the crypto community mobilized, leading to Ukraine receiving over $100 million in cryptocurrency donations so far. Binance, through its philanthropic arm Binance Charity, has donated $10 million to aid humanitarian efforts in the country.

After partnering with international NGOs to deliver immediate assistance, we embarked on a new innovative approach to crypto donations.

In the wake of a crisis, and when initial efforts to secure safe water, shelter, and medical aid have been carried out, cash-based intervention (CBI) has long been considered one of the most important and effective steps in helping people rebuild their lives. It allows them the dignity and independence to purchase essentials, offering a semblance of normality while also stimulating local economies again. 

When people are forced to flee their homes, they leave with the bare essentials. They also lose their ability to earn and spend in the process. CBIs seek to protect refugees by reducing the risks they face and to maintain their capacity to spend. CBIs can be used in a variety of settings, as long as there is a stable market and a safe way to provide refugees with cash or vouchers.

CBIs make the displaced less likely to resort to harmful coping strategies, such as survival sex, child labor, family separation, and forced marriage. They also directly benefit the local economy and can contribute to peaceful co-existence with host communities.

However, in the face of huge logistical hurdles, traditional CBIs aren't without their challenges — including timing, transparency, and high banking fees.

Crypto has long been able to reach places the traditional financial system cannot, serving those who can’t access typical banking methods. Banks often refuse to operate in war zones and are usually bound by borders where an ongoing conflict is occurring, leaving those impacted without access to essential funds.

Unlike refugees in many other countries, those in Ukraine have access to the Internet, smartphones, and existing banking systems (credit history, bank accounts, etc.). Many are likely to have official documentation, such as IDs, and are entering neighboring countries that possess reliable financial infrastructure, rule of law, and licensed, fully operational fintech and financial services.

That’s why, as part of our efforts to support the people of Ukraine, we’ve developed a crypto-based cash assistance program that is faster, less costly, and more transparent than traditional cash transfers for aid.

Traditional CBIs can take weeks to complete transfers between organizations and banks and their beneficiaries, whereas with crypto, verified recipients receive funds instantaneously.

Crypto not only helps to save time but money as well — the cost of bank transfers and other digital remittance services are often far greater than that of crypto transfers (ours cost under 10 cents per transfer).

Finally, with everything irrefutably recorded on a public ledger, the entire donation chain is 100% transparent. 

As such, we launched the first-of-its-kind Binance Refugee Card and with it, a crypto-based cash assistance program, Crypto-to-Cash. Through this program, we helped 15,000 people by sending emergency financial aid of 75 BUSD (a stable coin pegged to the USD) per month to refugees and internally displaced people (IDPs) for a three-month period.

“We are immigrants from Kharkiv. When we found a shelter in a safer city, I really wanted to please my seven-year-old son after all the horror we’d experienced. My son had dreamed of learning to play chess. Thanks to help from Binance, I was able to pay for my son's education. We are very grateful to Binance for their help!” — CS  

“I am very grateful for the financial help. Unfortunately, I do not have a job now. These funds have helped a lot in paying for utilities, food, and clothes for my daughter. Thank you very much.” — PU 

We first worked to identify two potential beneficiary groups for the initiative: refugees and IDPs. Refugees are defined as Ukrainians who flee the country due to the war with Russia, and IDPs are defined as Ukrainians who are unable to leave the country but have been displaced from their permanent homes due to the conflict. Binance Charity then developed two different solutions to assist these potential beneficiaries.

The first solution, the Binance Refugee Card, was launched in April 2022 for refugees who had been forced to flee the country. Due to technical restrictions, however, this solution is only available to refugees who have relocated to an European Economic Area (EEA) country.

The Binance Refugee Card allows refugees to register as regular Binance users so they can acquire BUSD that Binance Charity transfers to their accounts, use the card directly to make in-store purchases and can add their Binance Card to Google Pay to make online purchases.

We even had Lyudmila, an 84-year-old Ukrainian refugee, sign up to the programme. 

“This is my grandma with her Binance Refugee Card. Thanks for all that you’re doing to make crypto adoption real. Now I can support her by sending crypto through Binance Pay and she can use her card anywhere.” — SV 

The second solution, Crypto-to-Cash, is for both refugees and IDPs. Crypto-to-Cash allows beneficiaries to register as regular Binance users to gain access to BUSD, a stablecoin developed in partnership between Binance and Paxos, that Binance Charity transfers to refugees’ and IDPs’ accounts.

Beneficiaries can withdraw BUSD using a Visa or MasterCard issued by a Ukrainian bank or other national bank. They can also swipe either card to pay for in-store purchases. Alternatively, they can visit stores that accept crypto and pay using their BUSD via Binance Pay.

Crypto-to-Cash has also partnered with large retailers who accept crypto in online payments to vendors that allow mobile phone top-ups, or to retailers such as Travala, a site for hotel bookings.

“Of course, there are obvious benefits of using crypto. The first benefit is the speed of getting donations. Many of the IDPs’ fees had been registered with the United Nations program — there were hundreds of them and we barely could find anyone who had received donations in the first two months after registration. It's really not a fast process. With Binance Charity’s program, we were able to provide the first transactions within a week or so. We are deeply grateful for any donors who support the Ukrainian people, like the UN. All of them are good but the technical superiority (of crypto) is obvious for us.” — Anton Kosheliev, Project Partner, Palianytsia 

Before the war, Anton Kosheliev was an entrepreneur. As war broke out, Anton and his friends opted to stay in Ukraine and use their unique skills to start Palianytsia, a non-profit organization providing aid to other Ukrainians.

Having learned of their impact, Binance Charity first donated to help provide emergency resources such as food, shelter, and medical services. Following this, we onboarded Anton and Palianytsia as our NGO partner to help us deliver crypto-based cash assistance to IDPs. 

“On our website, we processed bank cards through different merchants and received a lot of donations but due to banks declining (these transactions), the success rate of receiving funds was around 70%. With crypto, the success rate of donations is always 100%.”  — Anton Kosheliev

Crypto-based cash assistance isn’t a new idea — major humanitarian organizations, including the World Food Program, UNICEF, Oxfam, and Devex, have all been running blockchain programmes. Nonetheless, it’s still not a widely used solution during humanitarian crises.

Binance has been using blockchain for good since 2018, exploring ways it can help serve and support people the world over. For example, we’ve worked with CARE to help Sudanese refugees and with Code to Inspire to retrain young Afghani women in tech after they’ve lost their careers. We’re also investing in innovation and research with top academic institutions to help advance and scale up Web3 solutions.

What have we learned? 

The displacement of people worldwide is set to worsen — and not just at the hands of war. International think tank IEP predicts that by 2050, 1.2 billion people will have been displaced due to climate change. Many of those people are among the world’s poorest and are often unbanked.

Without access to banking, they are unable to enjoy even the simplest financial needs, such as receiving salaries, securing loans, or having secure savings accounts. Traditional banking systems are failing many people, something that will only be exacerbated by cross-border displacement. 

We know Web3 can serve the masses by contributing to the development of financial infrastructure with low fees, as well as borderless and fast applications.

But to achieve this, we must work together. The key to the success of our Binance Refugee Program and crypto-based cash assistance was pulling together industry players and non-profit organizations. We’d like to give a special thanks to Ripple Impact for its generous support and $1 million donation and we hope we can continue working with a variety of organizations to offer speedy assistance to those in need, wherever they may be. 

Click the following links to learn more Binance Charity:

• Binance Charity

• Binance Charity for Ukrainians: Help Report

• Binance to launch Refugee Crypto Card