Fundraising projects using cryptocurrencies are growing in popularity due to cross-border transactions being easy to execute. A fundraising campaign for Covid aid in India collected millions of dollars in contributions within a few days. However, some hurdles do still exist.
India, the nation with the second largest population in the world, is currently suffering from a "tsunami" of new Covid cases. The country recorded nearly 350'000 illnesses on Sunday, which authorities and health facilities are struggling to combat. This marked the fifth consecutive day that India reported a record number of Covid cases, with the total number so far reaching 17 million.
Fundraising campaign in India
Spontaneously, Sandeep Nailwal (co-founder of Ethereum-based project Polygon) launched a campaign asking for help from the global crypto community. He said he'd take full responsibility for transparency, use of funds, and donation compliance. According to him, even doing obvious good can be hindered and complicated by authorities.
On the same day, Ethereum founder Vitalik Buterin thanked Sandeep Nailwal for the campaign and published proof of his donation of 100 Ether (ETH) and 100 Maker (MKR) on his Twitter profile. Currently, this amounts to almost 700'000 US dollars.
Thanks for organizing this @sandeepnailwal and thanks a lot for pointing this out @balajis!https://t.co/2PBOQKYuZqhttps://t.co/uOzQ15sZnL
— vitalik.eth (@VitalikButerin) April 24, 2021
After the appeal, many more personalities donated to the decentralized crypto fund, which was launched under the name #CryptovsCovid. The fund now accepts donations in Bitcoin (BTC), Ether (ETH), Dogecoin (DOGE) and various other cryptocurrencies.
Cryptocurrencies in India
India is still undecided on the status of cryptocurrencies within the country. Authorities are wavering between a ban and legalization. It was only in March 2020 that the Supreme Court lifted restrictions previously imposed by the Reserve Bank of India (RBI). After donating $50'000, former Coinbase CTO Balaji Srinivasan explained how cryptocurrencies could boost India's emerging economy.
"Today, fast and transparent flows of crypto to India are funding COVID aid. Tomorrow, we can use it to fund India's small businesses and startups." - Balaji Srinivasan, ex-CTO Coinbase and crypto investor
Insiders and entrepreneurs have already done a lot of lobbying with the government, detailing the economic benefits of cryptocurrencies and also stressing that a ban would be virtually impossible. India is already home to several notable cryptocurrency companies, which are seeing tremendous public interest. Today, it is possible for crypto exchanges to operate and procure a bank account in India.
Advantages and challenges
Some see this as a noble cause and therefore welcome it. Others would like more clarity on the legal aspects. Apparently, there is no clarity yet in legal circles on how the law will treat cryptocurrencies, so it could be open to interpretation.
The regulatory provisions do not directly address cryptocurrencies, but rather address donated items of value in general. In this case, only an approved organization may receive and manage donated funds.
