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Ukraine to issue NFTs to fund its military

By Aaron Woolner

07:27, 7 March 2022

Heart-shaped hands painted in the colours of Ukraine's flag
Ukraine looks to the NFT market to fund its military – Photo: Shutterstock

The Ukrainian government is to issue non-fungible tokens (NFTs) in a bid to fund its armed forces in the ongoing war in Ukraine.

On 3 March, Deputy Prime Minister Mykhailo Fedorov, who is also the country’s head of digital transformation, announced that Ukraine would issue NFTs to fund its military.

In his tweet Federov explicitly said there were no plans for a government backed cryptocurrency to be issued.

Pussy Riot backed NFT

The move came after one of the founding members of Pussy Riot said that she had raised $7.15m selling NFTs of the Ukrainian flag via UkraineDAO (digital autonomous organisation).

Federov subsequently tweeted that in just one week $50m had been raised by The Crypto Fund of Ukraine (CFU) and that it was aiming to double this figure by the end of the following week. 

He described the response to the CFU and an example of  “incredible unity before Putin’s encroachment on freedom and democracy”.

“We WILL win!” he added. 

Ukraine issues warbonds 

The Ukrainian government has also raised $270m already by issuing war bonds, denominated in local currency, to Ukrainian citizens. 

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“The proceeds from the bonds will be used to meet the needs of the Armed Forces of Ukraine and to ensure the uninterrupted provision of the state’s financial needs under the war,” the country’s finance ministry said in a statement on LinkedIn.

Federov also praised a move by Paypal to shut down its payment services to Russia. The move was announced by its CEO Dan Schulman in a LinkedIn post on Saturday.

“PayPal supports the Ukrainian people and stands with the international community in condemning Russia’s violent military aggression in Ukraine. The tragedy taking place in Ukraine is devastating for all of us, wherever we are in the world,” Schulman said in his post. 

Paypal suspends Russia service

While Paypal’s move is intended to pile the pressure on the Russian government in the wake of its invasion it will also have severe consequences for workers in Russia’s gig economy. 

One Russian citizen-based in Siberia told Capital.com ahead of Paypal’s move of her “fear and despair” at the potential for payment systems to be shut down given that she earned her entire income in dollars via Paypal. 

“I have taken all the money I could out of the bank and I’ve packed my rucksack, I just want to leave this country,” she said. 

Follow the author on Twitter: @aroaringboy

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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