The Taliban almost kills Bitcoin in Afghanistan
The country’s new leadership is making a strong statement by controlling the internet sector with an iron hand in response to increased Western sanctions.
Afghanistan’s digital asset utilization has skyrocketed since the Taliban’s takeover, almost bringing the economy to a stop. According to the blockchain analytics company Chainalysis, the country’s crypto metrics suffered a dramatic fall within two months after the Taliban’s August 2021 takeover owing to the regime’s severe policies.
The Middle East and North Africa had one of the greatest acceptance rates of virtual assets in the world, but Afghanistan’s adoption was limited. Prior to the Taliban takeover, the average monthly volume of bitcoin transactions in the nation was $68 million. This amount increased to around $168 million in the first two months after the takeover, as individuals turned to digital assets to circumvent monetary restrictions imposed by the West.
Two months following the takeover, digital currency transaction volumes in the Middle Eastern nation dropped to $80,000 per month, a fraction of what they had been before the takeover. The rapid decline occurred when the Taliban compelled crypto investors to “flee the country, suspend operations, or face jail” because the government equated cryptocurrencies to gambling and declared them haram.
Despite the Taliban’s closure binge of digital exchanges, the business is gaining little pace, with observers attributing this to subterranean activities like money laundering and corruption.
The steep fall in commercial activity in Afghanistan as a result of Taliban activity may have slowed the rise of cryptocurrencies in Afghanistan, although growth continues in neighbouring nations. Users in the Middle East and North Africa (MENA) saw a 48% increase in transaction volumes over the course of a year, with the total reaching $566 billion between June 2021 and July 2022.