Afghan residents are reportedly acquiring digital assets, which they use to preserve their savings and reduce the ability of the ruling Taliban to affect their financial well-being. Since the militant group took control, the value of weekly crypto transactions has doubled in some cases, according to a Bloomberg report.
Demand for digital currencies is increasing
Demand for digital currencies has reportedly skyrocketed in Afghanistan as residents seek to forestall a possible confiscation of their funds by the Taliban government. Additionally, digital currencies are being used to curb the Taliban’s influence on their economic well-being.
According to a Bloomberg report, some Afghans are looking to buy stablecoins like Tether because they are pegged to the US dollar. The report quotes a 26-year-old Afghan man, Habibullah Timori, as supporting claims that his compatriots are using digital assets to obtain savings. He said:
The demand for cryptocurrencies is high. During other crises, people kept their cash and jewelry in the floor or under their pillows. This time they decided to bury it in crypto.
The report also quotes another 26-year-old Afghan man, Naser Ali, who claims to have exchanged $30,000 in USDT in his safe. According to Ali, reports of the Taliban storming homes and confiscating belongings of Afghan citizens were a key factor in forcing him to switch from fiat to crypto.
Furthermore, in his remarks published in the report, Ali said he regrets not having known about cryptocurrencies earlier.
Residents charge a 1.5% commission per transaction
Meanwhile, since taking control of the country, the Taliban government has reportedly stopped secondary education for teenage girls. The group has also asked government employees to grow beards and introduced gender segregation at amusement parks. Shortly after the militant group overthrew the previous government, the US government blocked access to $9 billion in foreign exchange reserves.
While the return of Taliban rule has resulted in a change in the wealth of Afghan residents, it may have led to an increase in the volume of transactions processed by cryptocurrency exchanges. For illustration, the report points to Maihan, a cryptocurrency exchange that is reportedly now processing around $400,000 worth of crypto transactions per week. According to the report, this figure is more than double what Maihan was operating before the Taliban took over.
Despite the rising demand for cryptocurrencies, exchanges like Maihan say US sanctions on Afghanistan are making it harder for residents to buy digital currencies. Additionally, residents who shop at local crypto exchanges are charged a 1.5% commission on each crypto transaction.
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