Crypto activity in Afghanistan has suffered a huge setback since the Taliban took over the administration. The Taliban maintains a strict attitude towards cryptocurrencies and shows no signs that this attitude is likely to change anytime soon.
Reports from local media indicate that security personnel in the western Afghan province of Herat have cracked down on 16 cryptocurrency exchanges in recent days. There are strong allegations of arrests and detentions during the closure. The ongoing closure is due to the country’s three-month ban on cryptocurrency trading.
Around June, the Central Bank of Afghanistan banned online foreign exchange trading. According to the central bank, foreign cryptocurrency exchanges operating in the country are illegal. The central bank claimed that they were not registered before starting operations.
A source at Afghanistan’s central bank revealed that there is no room for online foreign exchange trading in Islamic law, thus prompting the country to shut down cryptocurrency exchanges.
Ghulam Mohammad Suhrabi, chairman of the Herat Currency Exchange Association, responded to the incident. According to him, the country's citizens are ignorant of blockchain innovation. Suhrabi added that the Taliban government wants to keep it that way, in line with Islamic law. He said that the authorities have a negative attitude towards cryptocurrencies and are willing to take extreme measures to enforce their policies.
Taliban Takeover Pushes Crypto to Center Stage in Afghanistan
Meanwhile, the Taliban’s takeover in 2021 put cryptocurrencies on the center stage in Afghanistan. Citizens of the country then turned to cryptocurrencies to protect their wealth and cope with the country’s economic woes. Still, they did not fully embrace Bitcoin and other alternative coins due to their volatility. Instead, they bought stablecoins to protect their wealth. This trend continued until the Taliban government introduced harsh policies on the cryptocurrency industry.
An Afghan citizen spoke to the media about the measures many Afghans have taken to protect their wealth. He talked about how citizens are hiding their wealth underground in preparation for uncertain times.
Ukraine has received over $60 million in cryptocurrency donations since the outbreak of war with Russia. Another important example is how the controversial Myanmar government has adopted USDT as a means of payment. The government has adopted USDT to raise funds to fight against the military government that took over last year.
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