The cryptocurrency caught hype in Afghanistan last year when the state’s economy got into trouble amidst the Taliban taking over Afghanistan in May 2021. After the Taliban came into power, the U.S. imposed sanctions that made buying crypto difficult, with western authorities ceasing billions of the assets of the country.
But after things changed and the country’s central bank banned the use of cryptocurrencies three months ago, the state’s police started a crackdown on crypto services platforms and businesses, forcing them to stop crypto-related operations.
In line with the country’s local media outlet, Arian News, security forces shut down 16 crypto exchanges across Afghanistan’s western Herat province over the last week and arrested their employees too. Not only that, police ceased the local crypto businesses and shops since the use of digital assets has been declared illegal, scamming the nation. Head of the counter-crime unit of Herat police, Sayed Shah Sa’adat, added;
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“Da Afghanistan’s Bank (central bank) stated in a letter that digital currency trading has caused lots of problems and is scamming people, therefore they should be closed. We acted and arrested all the exchangers involved in the business and closed their shops.”
Still, the names of fascinated crypto exchanges are unknown.
In line with the report, Ghulam Mohammad Suhrabi, head of the Money Exchangers’ Union in the country, also gave adverse statements about crypto use and added;
“Digital currency accounts are outside the country and are purchased from the 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].”
According to a Bloomberg report on June 28, Afghanistan’s Central Bank banned online foreign exchange trading calling it “illegal and fraudulent, and there is no instruction in Islamic law to approve it.”
The Afghani media outlet also quoted an expert’s opinion in the news who urged cryptos are still new to people and “therefore the process should be monitored by the government so that there will be no scamming and people can make better investments.”
Although crypto interest in the region increased, the U.S. sanctions made it difficult to purchase cryptocurrency for Afghans. The Taliban took over Afghanistan, left the economy in tatters, banks like platforms failed to bring foreign ads, and people were left with no money in their hands. Cryptocurrencies appeared as a source for Afghans to survive in a panic situation.
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As per the Global Crypto Adoption Index report of 2021 by the blockchain research firm Chainalysis, rising crypto interest entered Afghanistan in the top 20 countries, fastly adopting digital currency just before the Taliban took over. Likewise, google’s data also represented an increase in the searches for Bitcoin and Crypto.
Featured image from Pixabay and chart from TradingView.com
On February 8, 2024, the Hong Kong government launched a public consultation on the legislative proposal to establish a licensing system for virtual asset over-the-counter trading service (OTC) providers.
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