Demand for Digital Currencies Surges in Taliban-ruled Afghanistan

Demand for Digital Currencies Surges in Taliban-ruled Afghanistan

  

Afghan residents are reportedly acquiring digital assets that they use to preserve their savings and to diminish the ruling Taliban’s ability to affect their financial well-being. A Bloomberg report said since the militant group seized control; the value of crypto transactions per week has in some cases doubled.

"Demand for digital currencies in Afghanistan has reportedly surged as residents seek to preempt the possible seizure of their funds by the Taliban government. In addition, digital currencies are being used to curb the Taliban’s influence on their economic well-being."

As per a Bloomberg report, some Afghans are looking to buy stable coins like tether because they are pegged to the U.S. dollar. The report quotes one 26-year-old Afghan resident, Habibullah Timori, who confirms the assertions, that his countrymen are using digital assets to preserve their savings. He said:

"Demand for cryptocurrencies is high. During other crises, people stored their cash and jewelry on the ground or under their pillows. This time, they’ve decided to keep it buried in crypto. "

The report also cites another 26-year-old Afghan, Naser Ali, who claims to have converted $30,000 stashed in his safe into USDT. Ali has said that the Taliban are storming homes and confiscating Afghan citizens’ belongings. It is one of the key factors that have compelled him to convert his fiat money to crypto.

Further, in his remarks published in the report, Ali said he regretted not having known about cryptocurrencies sooner. However, residents are charged a high commission of 1.5% per transaction.

Meanwhile, since taking control of the country, the Taliban government has reportedly suspended secondary education for teenage girls. The group has also asked government employees to grow beards and has instituted gender segregation in amusement parks. Just shortly after the militant group toppled the previous government, the U.S. government blocked access to $9 billion in foreign exchange reserves.

While the return of Taliban rule has led to a change in Afghan residents’ fortunes, it may have also led to a surge in the volume of transactions handled by cryptocurrency exchanges. To illustrate, the report points to Maihan, a cryptocurrency exchange that now reportedly handles crypto transactions valued at around $400,000 per week. According to the report, this value is more than double what Maihan was handling prior to the Taliban takeover.

Despite the surging demand for cryptocurrencies, exchanges like Maihan say the U.S. sanctions on Afghanistan are making it difficult for residents to buy digital currencies. Furthermore, residents buying from local crypto exchanges are charged a commission of 1.5% for every crypto transaction.