Why is the Taliban cracking down on crypto exchanges in Afghanistan?
After the Taliban took power last year, the use of cryptocurrency increased in Afghanistan, but it appears that the police are now cracking down on the local market.
After the Taliban’s takeover of Afghanistan’s capital Kabul last year, Afghans turned to cryptocurrency as the old monetary system ground to a halt.
Most bank branches had closed, and those that were open saw long queues of people trying to withdraw cash.
Foreign donations and payments were no longer possible via the banking system. Therefore, transferring funds directly to a person’s bitcoin wallet was a more feasible option.
However, a year later, Taliban authorities are now cracking down on the local market, reportedly shutting down at least 16 cryptocurrency exchanges in the country’s western Herat province, according to Blockworks.
It was not clear which cryptocurrency exchanges were affected by the closures.
According to Sayed Shah Sa’adat, head of the police’s anti-crime department, the central bank banned cryptocurrency trading as the practice led to fraud.
Sa’adat said all local crypto business owners were arrested and their businesses shut down.
READ MORE:
Afghan female entrepreneurs defy the Taliban curbs on women’s education
In June, the Taliban-controlled central bank banned all online currency trading.
A bank spokesman told Bloomberg that the practice is illegal and fraudulent.
After the Taliban’s return, the United States blocked the group from accessing $7 billion in Afghan central bank reserves held on account at the Federal Reserve.
The Taliban is virtually cut off, and according to a former acting governor of the Afghan National Bank, the group only has access to 0.1-0.2% of these funds.
In February, the armed group said it would discuss whether digital tokens could be allowed under Islamic finance customs.
Here is your Bitcoin and Afghanistan thread 🧵, I will turn this into an article when I have enough questions and suggestions here in response.
The thread will be incomplete and I will continue to add to it.
Let’s start with the cointelegraph article on Crypto in Afghanistan.
1/N
👇👇 pic.twitter.com/iGnVKKiSsj— Noor Ahmad ⚡ (@nahafghan) 23 February 2022
Religious experts had long predicted that the Taliban would ban cryptocurrency because it has aspects of gambling and uncertainty, which Muslims see as sinful.
Other Muslim nations have adopted a more tolerant attitude. For example, in Dubai’s free zone, the United Arab Emirates allows cryptocurrency trading, while Bahrain has embraced digital assets since 2019.
In 2013, Roya Mahboob co-founded the Digital Citizen Fund, a non-profit organization that teaches young Afghan women computer programming and financial literacy.
With 11 women-only IT centers in Herat and two more in Kabul, the organization trained 16,000 women in everything from Windows software to robotics.
The organization refocused its efforts after the Taliban took control to train young women in bitcoin via Zoom video calls.
After a market crash that wiped out about $2 trillion in value and drove many well-known companies into bankruptcy, governments from South Korea to the United States are tightening controls on cryptocurrencies.
However, bans on cryptocurrencies are often less severe. For example, following China’s example, Afghanistan has joined the list of nations that have banned all bitcoin transactions.
Afghanistan is among the top 20 nations in the world for cryptocurrency adoption, according to a report published last year by blockchain research company Chainalysis.
Source: TRT World
