The co-founder of the Ethereum blockchain, Vitalik Buterin, donated roughly $US1 billion in a Shiba Inu-themed cryptocurrency to a covid-19 relief fund in India in May 2021. So far, according to Bloomberg, just $US20 ($27) million or roughly 2% of the original commitment has made it to its donation.
Cryptocurrency supporters often talk the crypto market up as being as fast, reliable, and efficient, if not more so, than cash transactions. The slow pace at which Buterin’s donations are actually being used to achieve results in India, however, highlights how regulatory snafus and the difficulty of moving wealth back out of the crypto market can interfere. And that’s before considering the lengthy vetting process common among charitable funds, which have to balance getting money where it’s needed with ensuring that it doesn’t go to waste.
Bloomberg reported on Wednesday that Buterin’s gift of 50 trillion coins of Shiba Inu, one of the many knockoffs of meme cryptocurrency Dogecoin, has encountered numerous obstacles. First, Buterin’s donation plans amounted to 5% of all of the cryptocurrency in circulation — which immediately resulted in a 50% price crash, wiping out half its value. (As CoinTelegraph noted, this did have the unintended side effect of putting a speed bump on rising transaction costs across the Ethereum network.) Sandeep Nailwal, the New Delhi-based entrepreneur behind the recipient India Covid Crypto Relief Fund, told Bloomberg he currently projects the donation to be worth $US400 ($544) million by the time it’s cashed out.
Nailwal added that in order to avoid violating India’s Foreign Contribution Regulation Act, all of the Shiba Inu coins have to be converted to U.S. dollars and then Indian rupees before they can go to any legal use. He told Bloomberg that the process is 80% complete, but that he’s also been cautious with disbursement to ensure the money reaches organisations that are having a real impact on the local level. $US20 ($27) million more is in the pipeline, Nailwal added, and the $US20 ($27) million already spent has gone to shoring up food supplies and setting up intensive care units for patients across India.
India has been ravaged by the coronavirus pandemic, particularly in dense cities where average citizens often struggled to gain access to basic medical services well before the virus began circulating and engulfed hospitals and clinics with a never-ending deluge of patients. In April, when the highly transmissible delta variant of the virus began hitting its peak in India, tens of thousands fell ill a day, crematories were overwhelmed in cities like New Delhi, and funeral pyres burnt 24/7. The country is now estimated to have surpassed 31.5 million confirmed cases with over 422,000 deaths, though these numbers are widely considered an undercount. Researchers from the U.S.-based Centre for Global Development have estimated total excess deaths during the pandemic in India could be in the range of 3.4 million to 4.7 million.
Many Indian survivors of the virus have been left trapped with potentially insurmountable medical debt, according to the Associated Press, and just 25% of the population has received at least one dose of a coronavirus vaccine.
Nailwal told Bloomberg the fund has “been in preparation for the third wave” of the virus. Despite rising case numbers, many state governments across India have loosened restrictions, with the South China Morning Post reporting that courts and medical associations have been among the sole institutions urging caution against reckless decisions.
The Indian government under Prime Minister Narendra Modi has been broadly hostile to cryptocurrency and was reportedly considering legislation to make it a crime to mine, trade, or even hold cryptocurrencies like bitcoin earlier this year. Although a bill was introduced, it went nowhere, and as of June 2021, the central government was still in the process of working out how any potential regulation should work.