- The Taliban government has banned trading in forex and cryptocurrency. 16 exchange accounts were arrested over the past week
- For many Afghans this week has laid bare the worst-case scenario for a country running legacy financial rails. Is there hope ??
The Taliban government has banned trading in forex and cryptocurrency claiming that it involves scams and theft. Crypto is the future of banking and financing in the world and it is becoming the most popular method of trade. seems like crypto isn’t in Afghanistan’s future after all, unfortunately.
Afghanistan was showing more and more interest in cryptocurrency and it was on its way to becoming one of the top adopting crypto nations. All individuals who were involved in cryptocurrency trade and also had shops ended up in handcuffs.
The exchanges were given a” warning” a week prior to complying with the Taliban’s way of wrecking the economy. Some of course were rebellious to bend to their will, they earn from crypto, and learn from it, and they understand the benefits cryptocurrencies would bring to their nation.
Why were they Banned?
The individuals familiar with Binance and crypto said that they mostly used the exchange accounts to trade, send and receive assets. Currently, crypto retailers do not have any monetary services or standard banks. As the Taliban officials claim that they are protecting their people from scams, individuals involved in crypto claimed that they haven’t bypassed any crypto-related crime.
It is evident that the only reason for the ban is the decentralized nature of cryptocurrencies and their underlying blockchain technology. The Taliban government banned it because they cannot control it.
The government wants to see, control, and manipulate everything in the country. Crypto is volatile, but everyone who uses it must know that it is worth the sweat. Afganians also have stablecoins like Tether, USD Coin, and many more for the people who just want to send or receive remittances to/from other countries.
“It’s quite clear at this point who the Taliban are and what vision they have for Afghanistan. But what we keep asking is–what will the world do about this, in 2022?” https://t.co/vrpFBxbX94
— Heather Barr (@heatherbarr1) August 29, 2022
What does the Taliban crackdown mean for Afghanistan
After the return of the Taliban government, the economic situation is deteriorating faster than a rocket crash. All the exchanges that were banned, were located in the western province of “Herat” where technological projects were established. This means that the technological infrastructure in Afghanistan is also going down the stream of unemployment.
Afghans face a horrific cash shortage, expensive basic goods, plunging currency, and closed borders. Could the situation for Afghans get any worse? Taliban’s repressive reign in Afghanistan has caused, the financial situation of local people to decrease as billions of dollars in foreign aid ceased and US sanctions froze its foreign assets. For how long will this go on?
The effects of the Taliban takeover rose local interest in cryptocurrencies, but sanctions made it difficult for residents to buy digital assets. The decision-making of the Taliban government doesn’t seem to get better for the citizens as they continue to starve.
said Ghulam Mohammad Sohrabi, head of Herat Money Exchangers’ Union.
Digital currency accounts are outside the country and are purchased from companies. Our people are not familiar with it, so it is better not to use it. This currency is new in the market and has high fluctuation rates.
Many local banks are at a high risk of failure, humanitarian organizations are struggling to bring funds into the country to pay for their operations while ordinary afghans can not access the cash needed for their basic needs.
It has become difficult to withdraw money from banks. The expensive transaction rates that we are wanting not forgetting that one has to wait through the long queues. There are always a bunch of hidden fees when using services like SWIFT, Western Union, MoneyGram, and the local Hawala system.