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Amid US sanctions, Afghans have turned to cryptocurrencies.

Photo: Pexels.com
Since the Taliban took power, US sanctions, bank failures, and cuts in foreign aid and cash transfers have wreaked havoc on Afghanistan's economy. The crook comes to the rescue.




Farhan Hotak, 22, from the southern Afghan province of Zabul, had no cash after the Taliban took over in August last year.


Mr Hotak's only source of income was a few hundred dollars bitcoin in a virtual wallet. After converting it into a traditional currency, Hotak managed to escape with his family of ten to Pakistan.


"After the Taliban took over, corruption spread like wildfire in Afghanistan," he said. "There's almost no other way to get money."


Mr. Hotak and his friends use Binance's P2P crypto exchange, which enables them to buy and sell their coins directly with other users on the platform. Mr. Hotak takes temporary refuge in Pakistan and trades in bitcoin and etherium again and now travels back to Afghanistan, blogs and teaches people about cryptocurrencies - digital money There is no physical form of which there can be no value.


Fans of cryptocurrencies say they are the future of money and will prevent people from relying on banks. And in Afghanistan, it is the banks that have stopped working, and that is why people are turning to cryptocurrency, not only for trade, but also for survival.




Google Trends data shows that web searches for "bitcoins" and "cryptocurrencies" in Afghanistan increased even before they took power in Kabul in July, while Afghan citizens in vain attempts to withdraw cash. Standing in line outside the banks.

After the Taliban took over in August 2021, the use of cryptocurrencies increased rapidly. Last year, the data firm Chainalysis ranked Afghanistan 20th out of 154 countries it considered corrupt.


Just a year ago, in 2020, the company so underestimated Afghanistan's corrupt presence that it had to be completely removed from its rankings.


According to Sanzar Kakar, an Afghan-American who created HesabPay, an application that helps Afghans transfer money through cryptocurrencies, in 2019, the country's "corrupt revolution" is the result of US sanctions against the Taliban and the Haqqani network. Who is in power now.


Sanctions mean that all transactions with Afghan banks have been stopped. The United States confiscated $ 7.1b (£ 5.4b) of assets from the Afghan central bank and halted the transfer of US currency. Polish and French companies agree to print depleted deliveries in Afghan currency.


The Association for Global Interbank Financial Telecommunications, also known as Swift Systems, which oversees international financial transactions, has suspended all services in Afghanistan.


The liquidity crisis meant that commercial banks could not lend, and retail consumers could not borrow from banks.


The war-torn economy, with 80 percent of its GDP coming from foreign aid and donors, was on the brink of collapse in Afghanistan.


"We are using corruption to solve the problem of sending 22.8 million Afghans to starvation, including one million children who may die of starvation this winter," Mr Kakar said.


Applications like Mr Kakar's HesabPay allow instant transfer of money from one phone to another without affecting banks, the Afghan government or the Taliban. In the three months since its launch, the application has had more than 2.1 million transactions and 380,000 active users.


Aid organizations have also seized on the potential for corruption in Afghanistan.

In 2013, Roya Mehboob founded the Digital Citizen Fund, an NGO dedicated to teaching young Afghan women computer programming and financial literacy. The organization had 11 women-only IT centers in Herat and two in Kabul, where 16,000 women were taught everything from Windows software to robotics.


Following the Taliban takeover, the group refocused its efforts to train young women in cryptocurrency through zoom video calls.


The Digital Citizen Fund has started sending money to Afghan families through cryptocurrencies to provide them with food and shelter, and in some cases, to help people move out of the country.


Ms Mehboob told the BBC: "Corruption has been very important to Afghanistan for the past six months. Everyone is talking about trade. Coins and bitcoin have been talking," Ms Mehboob told the BBC.


The ones gaining ground in Afghanistan are the so-called "stable currencies", the virtual currencies linked to the US dollar, which usually eliminate the volatility associated with corruption. Recipients then convert stable currencies into local currency on currency exchange.


They can be sent directly to recipients without the need for a bank account.

But there are barriers that make it harder for the average Afghan to access cryptocurrency.


Internet access is increasingly restricted. By January 2021, there were 8.64 million Internet users in Afghanistan, according to DataReportal.com.


Incredible power is another major problem because power outages are common. The country's new Taliban rulers have been accused of failing to pay Central Asian electricity suppliers. And with the banking system paralyzed, many Afghans do not have the means to pay their electricity bills.


Education is also key when it comes to corruption. Mr Hotak said he had found reliable online communities on Telegram, WhatsApp and Facebook offering him trading tips and advice. But there is also a lot of misinformation about cryptocurrencies that can be easily found online.


Despite the strict learning curves and many barriers to entry, the use of cryptocurrencies in Afghanistan is seen as an improvement in stagnation.


But cryptocurrencies are not the silver bullet, he said. Nigel Pont, senior advisor at HesabPay. He said it was important to lift sanctions on Afghanistan's financial situation in order to alleviate growing poverty.


"These are the failures of the traditional centralized fat system that is starving Afghanistan."


In February, US President Joe Biden signed an executive order handing over 7 7 billion frozen Afghan funds to help Afghanistan and the 9/11 US victims who attacked the Taliban and al-Qaeda in 2010. I sued for his role.

Although reports say the administration will send the remaining half of the frozen Afghan foreign reserves to humanitarian groups, the executive order does not specify how the money will be released, and it is not yet clear.


Most people in Afghanistan are still waiting to get rid of liquidity and unemployment, and the United Nations has warned that by mid-2022 the country could reach an "almost global" poverty rate of 97%. Millions of the country's inhabitants are on the verge of starvation.


Mr Hotak said: “We want the US sanctions to be lifted so that we can trade and see our families abroad. We want the frozen money to be given to the families in Afghanistan.”


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