Challenges and Opportunities of Using Digital Currencies in Ukraine's Recovery: Impact on Human Rights (Problems of Legality)

Summary

• Between 2022 and 2024, the UN World Food Programme's Building Blocks blockchain system was utilized in Ukraine by 65 organizations to coordinate aid distribution, preventing duplication and saving 67 млн дол. США.p.12
• The Building Blocks platform processed data for 4.8 млн домогосподарств in Ukraine and identified 855 тис. duplicate cases, achieving cumulative savings of 200 млн дол.p.12
• Historical reconstruction efforts in Iraq during 2004–2005 resulted in roughly 8.8 мільярда доларів disappearing without proper accounting due to cash reliance and inadequate oversight.p.13
• Humanitarian initiatives such as UNHCR's pilot project delivered direct cash assistance to displaced individuals in Ukraine using USDC stablecoins on the Stellar network.p.8
• Initiatives like Aid For Ukraine and UkraineDAO demonstrated that digital currencies and Web3 tools can rapidly mobilize international financial contributions during crises.p.7

Key insights

1. Digital currencies provide valuable additional mechanisms for post-war reconstruction by expanding financial inclusion and enhancing transparency in aid distribution.p.2
2. Central bank digital currencies like the e-hryvnia improve payment control and efficiency but introduce risks of centralized financial surveillance.p.6
3. Stablecoins facilitate rapid cross-border transfers and humanitarian relief payments but require regulatory safeguards concerning reserve management.p.6
4. Cryptocurrency donations effectively raise private funding globally but expose donors and recipients to price volatility and legal uncertainty.p.6
5. The immutability of distributed ledger technology creates tensions with data protection rights, such as the right to be forgotten or to correct erroneous data.p.13
6. Implementing digital currency solutions in post-conflict recovery requires continuous human rights due diligence from both government bodies and private tech providers.p.14