Simply put, the novel coronavirus (COVID-19) has turned life as we know it around the globe upside down. The blockchain and cryptocurrency industry is known for its volatility, but it has played a wide range of values during the epidemic and we will continue to see its wilder side.
Cryptocurrencies and their rise during the pandemic
The epidemic has already had a huge impact on financial markets. In the face of such economic extremes, cryptocurrencies are relatively stable and accessible due to the rapid rise of digitization and the spread of high-speed internet across continents. The lack of centralized management to position it against inflation is a possibility and positions it similarly to gold in digital form. The value of bitcoin increased from $7,000 in January 2020 to $17,000 in November 2020. This is partly due to its increased demand whenever it approaches its maximum limit. The increase in demand and limited supply pushes up its value.
Several reasons that attract people to cryptocurrency are its resistance to fraud, identity theft, virtually no transaction fees, and instant transactions. Cryptocurrency is highly volatile compared to traditional assets whose value can be predicted to a large extent. As a result, investing in it has become popular, especially in the last year, due to its unpredictability, similar to the stock market, which has sometimes led to significant increases in its value. And in 2021, it hit an all-time high of $64,000.
The popularity of cryptocurrencies can also be attributed to the fact that the vast majority of the Indian middle class is unemployed due to the country’s repeated blockades, leading them to invest in cryptocurrencies to maintain their income. The rise of crypto influencers on social media and the popularity of the topic by celebrities such as Elon Musk have also fueled the hype. In addition, with the emergence of the coronavirus, investors around the world realized that relying on the cryptocurrency market alone was particularly destabilizing, as the cryptocurrency market relied heavily on companies that suffered significant losses during the outbreak.
While the first wave of coronaviruses hit India slowly and relentlessly, the second wave was sudden, with a resurgent outbreak that began in April 2021 and had a huge impact on Indian households.
Leveraging the widespread adoption and popularity of cryptocurrencies, India has brought together some of the best minds in crypto and blockchain to help patients and their families navigate the financial strain of India’s failing healthcare system. That’s why India has established the COVID-19 Cryptocurrency Relief Fund.
COVID-19 Crypto Relief Fund: What is it?
In April, during the second wave of the epidemic, India began dealing with a severe shortage of medical supplies such as oxygen cylinders, medicines and hospital beds. The record number of deaths in a single day was also directly attributed to these shortages.
On April 24, Polygon co-founder Sandeep Nailwal tweeted that he would begin a COVID-19 encrypted relief fund in response to the devastation caused by the virus to families and the inability of the healthcare sector to provide amenities to all those affected, and that donations to the fund would provide essential healthcare and necessities to those struggling to raise funds for themselves. Nailwal’s Polygon, a company that connects and builds ethereum-based Layer 2 solutions, provides him with the expertise necessary to operate a relief fund that accepts cryptocurrency as its donation.
In addition to the charitable aspect, some of the key features of the COVID-19 Crypto Relief Fund are its full transparency, compliance, and the fact that Nailwal is completely responsible for the distribution of funds. Nailwal set up the fund with the help of volunteers and has worked extensively on bypassing regulatory issues and reclaiming foreign donations. With the exception of Bitcoin, donations accepted in the relief fund are popular cryptocurrencies such as Ripple, Litecoin, Ethereum, etc. Enter donor records into a Google Form and store basic donor information … if contact is required. International media coverage caused a massive campaign of donor support, leading Indian regulators to worry about money laundering and a growing cryptocurrency relief fund that is not easily converted into the country’s legal tender.
Within four days of the relief fund’s launch, the account had amassed $1 million. Ether co-founder Vitalik Buterin, former Australian cricketer Brett Lee and Balaji Srinivasan have all donated to the fund.
How does it work?
COVID-19 Crypto Relief Fund has set up an address maintained through Ether. Cryptocurrency investors from around the world send donations to that address, which are then cleared through an international cryptocurrency exchange. In turn, that cryptocurrency exchange converts the funds into fiat currency, which is then returned to the fund.
The foundation’s bank account linked to the exchange is then transferred to a Dubai bank. Dubai Bank remits the funds to local Indian non-profit organizations that meet the Foundation’s criteria and adhere to the guidelines set by the Indian government. These guidelines are in line with the government’s policy on non-profit organizations and their receipt of foreign aid.
It is worth mentioning that the donations received by the foundation are transparently published in a spreadsheet on its website.
Legality surrounding cryptocurrencies in India
In May 2021, the Reserve Bank of India issued a circular upholding the Supreme Court’s judgment, which determined that banks and lenders cannot deny services to people holding cryptocurrencies. However, even with the issuance of the circular, the Reserve Bank of India unofficially asked banks and lenders to sever ties with cryptocurrency dealers and exchanges. Most importantly, access to foreign aid through cryptocurrencies is also under the watchful eye of regulators.
Currently, the government is seeking to pass regulations on cryptocurrencies and implement a central bank digital currency (CBDC) with the support of the Reserve Bank of India. However, these steps are strongly opposed by the majority of the cryptocurrency industry.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/how-covid-19-crypto-relief-fund-is-providing-assistance-in-indias-fight-against-the-epidemic/
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