HOW $ 1 BILLION DONATION TO INDIA TURNED INTO 400 MILLION: Cryptocurrencies show how volatile they are
The remarkable altruistic gesture of Vitalik Buterin, co-founder of Ethereum blockchain, donating a billion dollars to India to help them fight the pandemic, showed the true picture of cryptocurrencies.
Photo Credits: UNSPLASH/ EXECUTIUM
Vitalik Buterin had the best intentions when, in May 2021, he donated 50 trillion Shiba Inu coins (then worth about $ 1 billion ) to India, as aid in the fight against the pandemic. Of that billion dollars, only 20 million, or 2%, found their way to donations .
Why did this happen?
If you have tracked cryptocurrencies you know that the value of most coins can change very quickly. The slow pace of using Buterin's donations shows exactly how dynamic the cryptocurrency market is, and how difficult it is to convert large amounts of cryptocurrencies into regular currencies in addition to the regulatory bodies of different countries.
Of course, it should be added that there are procedures that should be followed when that money is distributed to the people who need it the most.
Holes in the road
From the moment Buterin donated a billion dollars worth of Shiba Inu coins to the present day, a sea of problems has been prevented, which have slowed down and made it impossible for that money to get where it was needed. The first problem was the amount of Shiba Inu coins that Buterin donated. Those 50 trillion make up 5% of the total amount of Shiba Inu coins in circulation, so moving that amount of money instantly halved the price of this cryptocurrency on the market, and thus the value of the donation. In addition, the large amount of Shiba Inu coins also had an impact on raising the value of transactions of the entire Ethereum network, on which the Shiba Inu blockchain operates.
According to Sandip Nailval, who maintains the India Covid Crypto Relief Fund, to which the money was paid, the current value of the donation at the time it is converted into regular currencies will be around $ 400 million, or 40% of the initial value. In order to avoid additional taxation through the Indian Foreign Donation Regulation Act, Shiba Inu first had to be converted into US dollars, and then into rupees, before any use, which further reduced the value of the donation.
Most of the conversion is done
The same interlocutor told Bloomberg that the whole process is 80% complete and that they are now dealing with the process of allocating money where it is most needed - to organizations that are fighting the pandemic locally. $ 20 million is in circulation, and $ 20 million has already been spent on replenishing food supplies and setting up intensive care units for patients across India.
India is one of the countries hardest hit by the coronavirus pandemic, especially in densely populated areas where residents had difficulty coming to basic medical services even before the pandemic occurred. Nailval said that the fund will come in handy as a preparation for the third wave of the virus so that as many patients as possible receive appropriate care.
In India, about 25% of the population has been vaccinated, which is a small number compared to the desired figures needed for the nation to fight the pandemic. Despite the growing number of patients, India recently announced an easing of measures, despite great opposition from doctors.
Strict attitude towards cryptocurrencies
The Indian government of Prime Minister Narendra Modi has shown hostility towards cryptocurrencies and plans to pass a law that considers mining, trading, and possession of cryptocurrencies a crime. One of the laws that should ban cryptocurrencies in India was presented to the government in June this year, but the government is still in the process of finding an appropriate way to implement the new regulations.
By: Olivia J. - Gossip Whispers