Afghan crypto market battered – Bitcoin driven out of Afghanistan
Cryptos or life – The Taliban have sounded the death knell for cryptocurrency adoption in Afghanistan, with a regulations which has wiped out hundreds of millions of dollars in on-chain transfers in the country in the past.
The Taliban are driving cryptocurrency out of Afghanistan:
They had three options: flee the country, cease operations or risk arrest “. The return of the Taliban to power was fatal to the adoption of cryptocurrencies in Afghanistan.
According to a report of October 5th of Chainalysis, the country was at the twentieth place of its adoption index in 2021, before the Taliban found themselves at its helm again in August last year. Afghanistan now finds itself at the bottom of the ranking.
Cryptocurrencies are included in the list of victims the re-establishment of the Ministry for the Propagation of Virtue and the Prevention of Vice, the institution responsible for enforcing Sharia law in the country. The ministry has declared cryptocurrencies to be haraamcomparing them to gambling.
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Millions of dollars in the crumbs of laundering
The numbers are irrevocable. Users received less than $80,000 in cryptocurrencies per month on average on the blockchain, from November 2021 until recently, an amount well below $68 million received per month on average, before the Taliban took over.
According to a source cited by Chainalysis, the crypto transactions that remain in the country today are largely those related to the money launderingresulting from illegal activities such as drug trafficking or bribes.
And while cryptocurrencies could theoretically serve as a store of value or benefit the unbanked, this source however refers to the relatively small number “ smartphone users and sparse cellular networks in Afghanistan as also being major obstacles to the adoption of Bitcoin (BTC) and its cadets in the current context.
This report by Chainalysis thus goes against the grain of certain articles which, on the contrary, indicate an increase in the demand for cryptocurrencies in Afghanistan, with a population that would turn to digital assets to preserve their economic well-being. Resistance in Bitcoin may be organizing in the countrybut its scope must therefore be nuanced to avoid blind and irrational optimism.
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