Cryptocurrency popularity in Afghanistan surged after the Taliban’s overthrow a year ago, but officials are now apparently cracking down on the local scene.
As a result of the Taliban’s takeover of Afghanistan last year, crypto became crucial for some Afghans, but authorities are now cracking down, allegedly shuttering at least 16 crypto exchanges in the country’s western Herat region.
Local independent news station Ariana reported on Wednesday that the action occurred three months after Afghanistan prohibited crypto trading. It was not specified which cryptocurrency exchanges will be impacted by the shutdown.
The chief of the police’s anti-crime section, Sayed Shah Sa’adat, told reporters that the central bank had outlawed crypto trading since the activity had produced problems and frauds. He said that everyone participating in the local crypto enterprises was detained and their firms were shut down.
The Taliban-led central bank in Afghanistan allegedly halted internet foreign currency transactions in June. A spokeswoman for the bank told Bloomberg that FX trading is unlawful and deceptive and that Islamic law does not permit it. It is unclear if bitcoin trading comes within the scope of the prohibition.
After the Taliban retook control in Afghanistan, the local majority’s financial condition worsened as billions of dollars in international aid ended and US sanctions froze the country’s foreign assets.
Local interest in cryptocurrencies increased as a result of the Taliban’s takeover, but sanctions made it impossible for citizens to acquire digital assets.
Web searches for “bitcoin” and “crypto” increased soon before the takeover, according to Google Trends data. Afghanistan joined the top 20 nations on Chainalysis’ Global Crypto Adoption Index, which measures the prevalence of digital assets, in 2021.
Numerous proponents, such as US Deputy Secretary of the Treasury Wally Adeyemo, have claimed that crypto payment rails have the ability to alleviate the constraints of living in complex conditions.
“Imagine what a frictionless, global digital payments system with adequate safeguards for illicit financing might accomplish for people in areas like Afghanistan — if relatives overseas could simply send remittances or if NGOs could pay their personnel halfway across the globe with the push of a button on a smartphone,” Adeyemo said earlier this year at Consensus 2022. By press time, the Afghanistan Central Bank has not responded to Blockworks’ request for comment.
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