Indications in Afghanistan, especially under the Taliban depict virtual assets as mechanisms, returning the country to global market. Recall that many international non-governmental organizations and services withdrew their activities in Afghanistan following the enthronement of the Taliban last August. Many of these international companies included payment firms, particularly Swift and Western Union. This development, however crippled international transactions and trading in the Asian country. Accordingly, the article seeks to critically analyze how the country recovered into the international market via the usage of cryptocurrencies.
Since the discontinuation of the activities of the aforementioned services, Afghans saw cryptocurrencies as an alternative. They consequently developed a massive interest in the trend. Many of them moved to get schooled about the usage of cryptocurrencies and blockchain technologies. With this crypto embracement, Afghans grossly become eligible to receive remittances, avert U.S sanctions, and get paid from other countries.
Prior to this development, the 5,000-year-old nation lost several opportunities in the digital world, especially with the PayPal, Venmo and others in the country. In an interview with one online media, Heshmat Aswadi, a university student in the country, lamented that he and his colleagues lost several opportunities like blogging, online drop shipping, and affiliate marketing. According to him, the opportunities became lost because most of the aforementioned pay with Paypal.
Now a local crypto trader, he disclosed that he knows a lot about blogging but the knowledge became useless since getting paid online seemed impossible. Aswadi currently studies business administration at Herat University. The 22-year old student further that he knew about the crypto industry after it grew in 2021. Accordingly, he currently trades little amounts of virtual assets, which thus serves as an avenue for him to earn.
How Virtual Assets, particularly Crypto works in Afghanistan
As expected, the withdrawal of the services of money transfer industries had dire implications on the people. Many Afghans, especially those who rely on money from abroad without another source of income lost the opportunity. As things stand, crypto remains the only method through which funds become conveyed from other countries. Afghans realized the trend massively embraced cryptocurrencies. In the 2021, the country ranked 20th among 154 countries in Chainalysis 2021 crypto adoption index.
The usage of cryptocurrencies as a virtual asset in Afghanistan took a new dimension in 2021. The new approach manifested following the decision of Binance to withdraw support from Swift bank transfers in the country. This development, however, complicated the processes of depositing and withdrawing crypto since many of them uses Binance.
To defy the status quo, crypto users in the country use dealer’s offices, compelling them to pay in fiat currencies. The dealer, having collected fiat currency usually gets someone abroad to relay crypto to his wallet. The concerned dealer employs a local Hawala tech in depositing the received fiat into the sender’s bank account.
According to a crypto teacher, Ali Rahnavard, dealers avoid the usage of credit or debit cards because of the charges incurred for international transactions. After the success of the mutual transfer, the dealer’s customers receive the crypto, mostly Tether (USDT).
Crypto as an avenue for donations in Afghanistan
As of now, the Taliban government is yet to table any regulations or ban for crypto operations within the country. However, the Taliban reduced bank withdrawals in a bid to salvage insufficient circulation of cash amid U.S sanctions. In consequence of this, millions of Afghans starved, a development that fermented crypto donations in the country.
For instance, an entrepreneur and activist, Fereshteh Forough conveyed cryptocurrencies to female Afghans in need. The entrepreneur started a coding academy for the girls in the country in 2015 to inspire them into starting a lucrative career. The academy created Binance and Trust wallet accounts for over 100 girls to enable them to receive cryptocurrencies as payments and later exchange for fiat.
More so, Bookblocks.io and Women for Afghan Women agency initiated an NFT project last year. The effort materialized to educate the women in the country as well as the refugees in the U.S.
Given this, it becomes established that the adoption of cryptocurrencies plays an immeasurable role in pushing the country into the international market. However, the government needs to instill measures to encourage more participation in the trend as well as regulations to protect Afgans in the crypto world.