Since the Taliban took over Afghanistan in August of last year, US authorities have cut off financial sources to disrupt the state’s economy. As a result, money transfers became a severe problem for Afghans. Sanctions by the US unable Afghans from receiving foreign aid. But, cryptocurrencies popped up as an alternative payment medium to rescue them.
While the Taliban took possession, a multinational traveler journalist, Farhan Hotik from the province Zabul, was left with no money in his pocket. The only source which became helpful for him to flee abroad was a few dollars in Bitcoin. He cashed out his income from a virtual wallet and managed to take refuge in Pakistan with his family of 10 siblings.
After the Taliban takeover, crypto spread like wildfire over Afghanistan. There is almost no other way to receive money.
Notably, Farhan and his friends use Binance exchange, allowing P2P trading where users on the network can sell and buy their digital currencies directly with each other. He educates people about crypto-mania and teaches in Afghanistan that digital assets have value without physical existence.
Afghans Are Adopting Crypto Sharply
Alternatively, banks couldn’t afford to manage the situation and stopped working, which caused people to use cryptocurrencies to trade and, mainly, to survive.
It is also noteworthy that google searches for ‘crypto’ and ‘Bitcoin’ have risen in July prior the Taliban got possession in Kabul, and Afghans preferred cashing out their money skipping the banks.
Similarly, the Taliban’s takeover accelerated the use of digital currency in Afghanistan. Last year’s report of a blockchain research firm, Chainalysis, claims that Afghanistan has become the 20th country fastly adopting crypto out of 154.
A year before that report, the research firm revealed it was planning to exclude Afghanistan from its list of crypto-presence countries, as it had a very minimal figure in terms of adoption.
An Afghan American, Sanzar Kakkar, who in 2019 created an app HesabPay for Afghans that allows them to transfer money using virtual currencies, says that the country’s crypto revolution can be attributed to US Sanctions against The Taliban.
Restrictions Caused By US Sanctions
The sanctions by the US mean to stop all the transactions with Afghan banks. Alongside drying up the transfers of dollars, the US authorities have seized $7.1 billion of assets belonging to Afghanistan.
Moreover, the Swift system, known as Worldwide Interbank Financial Telecommunication, has also canceled all its operations tied with Afghans, making them unable to use its system for international financial transactions.
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The liquidity crisis unable users to cash out their own money or take loans.
Mr. Kakkar adds;
We’re using crypto to try to solve this problem, that 22.8 million Afghans are marching toward starvation, including one million children that might starve to death this winter.
An app like Kakkar’s allows Afghans to transfer money instantly between mobile phones without depending upon the banks and away from the Taliban. The app has surpassed 380,000 members and over 2.1 million transactions just after three months of its launch.
Featured image from Pixabay and chart from TradigView.com