Afghan residents are reportedly acquiring digital assets that they use to preserve their savings and to diminish the ruling Taliban’s ability to affect their financial well-being. Since the militant group seized control, the value of crypto transactions per week has in some cases doubled, a Bloomberg report has said.
Demand for Digital Currencies Surges
Demand for digital currencies in Afghanistan has reportedly surged as residents seek to pre-empt the possible seizure of their funds by the Taliban government. In addition, digital currencies are being used to curb the Taliban’s influence on their economic well-being.
As per a Bloomberg report, some Afghans are looking to buy stablecoins like tether because they are pegged to the U.S dollar. The report quotes one 26-year-old Afghan resident, Habibullah Timori, who backs assertions his countrymen are using digital assets to preserve savings. He said:
Demand for cryptocurrencies is high. During other crises, people stored their cash and jewellery in the ground or under their pillows. This time, they’ve 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 stashed in his safe to USDT. According to Ali, reports of the Taliban storming homes and confiscating Afghan citizens’ belongings was a key factor that compelled him to convert from fiat to crypto.
Further, in his remarks published in the report, Ali said he regretted not having known about cryptocurrencies sooner.
Residents Charged a Commission of 1.5% per Transaction
Meanwhile, since taking control of the country, the Taliban government has reportedly suspended secondary education for teenage girls. The group has also asked government employees to grow beards and has instituted gender segregation in amusement parks. Just shortly after the militant group toppled the previous government, the U.S. government blocked access to $9 billion in foreign exchange reserves.
While the return of the Taliban rule has led to a change in Afghan residents’ fortunes, it may have led to the surge in the volume of transactions handled by cryptocurrency exchanges. To illustrate, the report points to Maihan, a cryptocurrency exchange that now reportedly handles crypto transactions which are valued at around $400,000 per week. According to the report, this value is more than double what Maihan was handling prior to the Taliban takeover.
Despite the surging demand for cryptocurrencies, exchanges like Maihan say the U.S. sanctions on Afghanistan are making it difficult for residents to buy digital currencies. Further, residents buying from local crypto exchanges are charged a commission of 1.5% for every crypto transaction.