Afghan residents would buy 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 over, the value of crypto transactions per week has in some cases doubled, according to a Bloomberg report.
The demand for digital currencies is increasing
Demand for digital currencies in Afghanistan has reportedly increased as residents seek to anticipate the possible seizure of their funds by the Taliban government. Additionally, digital currencies are used to limit the influence of the Taliban on their economic well-being.
According to 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 resident, Habibullah Timori, as supporting claims that his compatriots are using digital assets to safeguard their savings. He said:
The demand for cryptocurrencies is high. In other crises, people have stored their money and jewelry on the floor or under their pillows. This time they decided to keep it buried in crypto.
The report also cites another 26-year-old Afghan, Naser Ali, who claims to have converted $30,000 hidden in his safe into USDT. According to Ali, reports of the Taliban raiding homes and confiscating Afghan citizens’ property was a key factor that forced him to switch from fiat to crypto.
Additionally, in his remarks published in the report, Ali said he regretted not hearing about cryptocurrencies sooner.
Residents charged 1.5% commission per transaction
Meanwhile, since taking control of the country, the Taliban government has reportedly suspended secondary education for teenage girls. The group also required government employees to grow beards and instituted 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.
Although the return of the Taliban regime has led to a change in the fortunes of Afghan residents, it may have led to an increase in the volume of transactions processed by cryptocurrency exchanges. To illustrate, the report points to Maihan, a cryptocurrency exchange that reportedly now handles crypto trades worth around $400,000 per week. According to the report, this value is more than double what Maihan managed before the Taliban takeover.
Despite growing demand for cryptocurrencies, exchanges like Maihan say US sanctions on Afghanistan are making it difficult for residents to purchase digital currencies. Additionally, residents buying on local crypto exchanges are charged a 1.5% commission for each crypto transaction.
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