It’s no secret that crypto is experiencing mainstream adoption, and with that charities are open to the technology.
One pattern we can see in organizations that adopt cryptocurrencies is that they have a multinational component, which means that international money transfers constitute a significant part of their operations.
Historically, international transfers have been extremely expensive – Bank of America charges up to $45 per wire transfer, while Chase can charge up to $50.
Unsurprisingly, 10% of Santander’s profits in 2016 came from transfer fees. Creating an opportunity for companies looking to significantly reduce fees, it was quickly grabbed by TransferWise (which declares up to 1% for transfers) and of course Bitcoin, which introduced society to the borderless nature of cryptos without requiring in-depth knowledge of the blockchain. .
Charities are benefiting from the evolutionary progress of cryptocurrencies as more nonprofits are starting to accept crypto donations, including Bitcoin, Ethereum, Litecoin, Cardano and Monero, as well as newer and lesser-known altcoins such as MASK. or GRT, thus helping circulation.
An estimated 4% of charities currently accept crypto, with UNICEF CryptoFund breaking records by becoming the first UN organization to receive crypto in 2019. Giving Block is another established service that works with hundreds of NPOs targeting different causes. . Also, despite being only in the UK, the RNLI has received over 20 BTC since 2014.
In addition to lowering fees, crypto donations increase public trust in the charitable sector. A donor using blockchain technology like VeChain can track what their money is being spent on, which has often been speculated by the public.
Additionally, cryptocurrencies allow these organizations to respond to crises faster, given the superior transaction speed of cryptos to fiat. Likewise, charities primarily operate with unbanked groups or regions. Think of the women in Afghanistan, LEDCs and refugees. This makes crypto an almost perfect match as it is decentralized.
Regardless, crypto-philanthropy, as MarketWatch defines it, is not entirely risk-free. One can cite the occasion when Vitalik Buterin, co-founder of Ethereum, donated $1 billion Shiba Inu for COVID relief in India. Shortly afterward, Shiba Inu’s value plummeted and 2 months later, the charity revealed that it was only able to extract $20 million from Buterik’s donation due to complications with the conversion as well as India’s regulations around cryptos.
However, crypto is diverse, and the case of Shiba Inu should not preclude crypto-philanthropy. Meme currencies have a reputation for being highly volatile, with those that prioritize capital preservation and risk-adjusted returns recommending not to invest in Shiba Inu and Dogecoin and others. The reason why the 27-year-old crypto billionaire decided to donate to Shiba Inu remains unknown.
Stablecoins appear to be more reliable alternatives to crypto-philanthropy. Backed by reserve assets like USD, cryptos donated in Tether or HUH Token are less vulnerable to the volatility felt by Shiba Inu and even Bitcoin. In addition, its stability benefits countries affected by high rates of inflation, where charities tend to operate.
Newcomer HUH Token got into crypto-philanthropy ahead of its December launch in partnership with Eden Reforestation Projects. The NGO works directly with communities affected by deforestation in extreme poverty.
HUH also blocked $1 million in liquidity over 2 years to maintain market stability. The recent 6,000% increase in the price of HUH suggests that crypto-endowed charitable donations could multiply in value, which would offer a lucrative stream of passive income for non-profits.
With all eyes on the crypto market, the next stage of its evolutionary progress is yet to come.
Information about the HUH token can be found here:
Web site: https://huh.social
HUH Official Swap- https://swap.huh.social/