Following a surge last year when the country was cut off from international banking and aid, the Taliban’s crackdown has caused a collapse in cryptocurrency use in Afghanistan.
According to a report by blockchain research company Chainalysis, the value of cryptocurrencies received in the nation has decreased to an average of less than $80,000 a month since November, down from a peak of more than $150 million in September of last year, just after the Taliban swept back into power.
According to the report, “The Taliban’s crackdown has had a massive chilling effect on the country’s crypto markets,” which added that “crypto dealers are left with three options: flee the country, cease operations, or risk arrest.”
Afghans used virtual currencies as a lifeline to receive donations and remittances from abroad as well as to protect savings from the Taliban, who had taken control following a chaotic US withdrawal and were shunned internationally.
The government outlawed cryptocurrency in August, referring to it as “haram,” or a sinful enterprise. Thirteen cryptocurrency traders were detained by the Taliban after they refused to stop trading digital tokens. Later, they were freed on bail pending trial.
Afghanistan, which ranked 20th in its cryptocurrency adoption index last year, is now at the bottom, according to Chainalysis.
According to the researcher, the Middle East and North Africa’s cryptocurrency markets are among the fastest-growing but also relatively small: From July 2021 to July 2022, users there received $566 billion in cryptocurrency, an increase of 48% from the previous year.
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