With the Afghan economy in shambles after the Taliban’s takeover of the country in May 2021, cryptocurrency was all the rage in the country last year. After the Taliban took over, the U.S. put in place sanctions that made it difficult to buy crypto, and western authorities froze billions of the country’s assets.
However, things changed three months ago when the country’s central bank prohibited the use of cryptocurrencies, and since then, the state’s authorities have begun a crackdown on crypto businesses and service platforms, compelling them to cease crypto-related activities.
According to reports from the Afghan news site Arian News, authorities have recently raided and closed 16 cryptocurrency exchanges in the western province of Herat and detained some of the exchange’s personnel. Not only that, the local police ceased the local crypto businesses and shops since the use of digital assets has been declared illegal, scamming the nation.
Head of the counter-crime unit of Herat police, Sayed Shah Sa’adat, added;
“Da Afghanistan’s Bank (central bank) stated in a letter that digital currency trading has caused lots of problems and is scamming people, therefore they should be closed. We acted and arrested all the exchangers involved in the business and closed their shops.”
The Rise of Cryptocurrency in Afghanistan
Google trends show that searches for “bitcoin” and “crypto” were also on the rise before the Taliban took over. Even more impressive, the Global Crypto Adoption Report Index in 2021 from Chainalysis placed Afghanistan in the top 20 countries worldwide.
In general, the use of cryptocurrencies has increased over the last several years, although the rate of acceptance differs widely across countries. The partnership between BlackRock and Coinbase gives institutional investors access to cryptocurrencies. This is just one of a number of big acquisitions that have happened in the U.S. market in the last month that is likely to push more people to use cryptocurrencies.
Something Similar in South Korea
In the meantime, South Korean authorities are working on a plan to limit access to 16 illegal cryptocurrency exchange platforms from outside the country, such as KuCoin and MEXC.
