The Afghan central bank declared cryptocurrency illegal last month and the Taliban has begun enforcing this ban. So far, 13 people have been arrested in the city of Herat and 20 businesses have been shut down.
Cryptocurrencies were a popular technology before the ban because they allow users to store value and conduct cross-border transactions despite international sanctions.
Taliban arrests after nationwide ban on crypto
According to a Bloomberg article the Taliban regime in Afghanistan arrests cryptocurrency traders who ignore orders to stop trading. The crackdown comes a month after the country’s central bank imposed a nationwide ban on crypto.
“The central bank gave us an order to stop all money changers, individuals and businessmen from trading fraudulent digital currencies, such as what is commonly referred to as Bitcoin,” said Sayed Shah Saadaa, head of Herat’s criminal investigations.
Herat is the third largest city in Afghanistan; it reportedly has four of the six Afghan crypto exchanges. Saadaa says 20 crypto companies in the city have now been shut down and 13 people arrested.
Stablecoins and crypto in Afghanistan
Demand for cryptocurrencies, particularly stablecoins, was high in Afghanistan before the central bank’s ban on the technology.
We all know the benefits of crypto in an authoritarian regime with a weak currency: privacy, value storage, and the freedom to move money around the world.
In countries where the home currency is unstable and there are restrictions on foreign currency, stablecoins offer a solution. Stablecoins are cryptocurrencies that strive to always be worth as much as government-issued currencies such as the U.S. dollar or the euro. Technically, then, you don’t own dollars or euros, you own crypto.
US sanctions Afghanistan
Afghanistan is suffering from the heaviest economic sanctions since the 1990s. The Americans imposed a new package of sanctions shortly after the Taliban returned to power and took Kabul. In addition, they also took 7 billion dollars from the Afghan treasury which was held at the Federal Reserve Bank of New York.
That’s the power of having power over the world reserve currency.
Cardano and Afghanistan
Last year, Charles Hoskinson interviewed by CNBC, he is the creator of Cardano. At the time, he expressed his expectation that “cryptocurrencies will play a greater role in Afghanistan […] in the war for and against Taliban forces.’
Hoskinson believed that digital assets could play an important role in providing financial privacy to Afghan civilians following the withdrawal of U.S. troops.
“The digital life of Afghan is now under scrutiny, the last two decades have been judged by a regime that if you expressed your opinion in a way that did not fit their regressive views, you are now threatened with harassment, imprisonment or even death.
He turned out to be right, but did not take into account a ban on crypto by the Taliban.
Is blockchain dead in Afghanistan?
In late 2020, LTO Networks announced it was working with two United Nations working groups to open a land registry for Afghanistan on blockchain.
Blockchain project goLandRegistry aims to keep accurate ownership records for the 2.8 million land parcels in Afghanistan, each of which is registered individually using LTO Network’s technology.
Landowners can then prove the authenticity of the document through the open-source blockchain verification tool. The website and social media of goLandRegistry have not been updated for a year and a half, so it seems that the blockchain ambitions in Afhanistan have been given a quiet death.
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