Many international non-governmental organisations and services have stopped operating in Afghanistan after the Taliban gained complete control over the country in August 2013. They included payment services such as Swift and Western Union.
Many Afghans began to study cryptocurrencies and the underlying technology of blockchain to at least receive remittances abroad. Afghans are missing many opportunities in the world of online business because electronic payment services such as Venmo and PayPal have not been made available in their country of 5,000 years.
Heshmat Aswadi (a local crypto trader) said in an interview that “we lost many opportunities such as blogging, affiliate marketing, and online dropshipping” because most of the companies pay via PayPal. I learned a lot about blogging, but it was useless since I couldn’t get paid online.
Aswadi, a 22-year-old student at Herat University, wanted to start a fintech blog. However, he lost his hope when he began researching how to get paid.
Later, he discovered about cryptocurrency “which was one the best things to happen to him,” said Aswadi. As the crypto industry grew, Aswadi gained knowledge as he went. He trades digital assets in small amounts, which allows him to make extra money.
Aswadi stated that governments and banks, particularly those in developing countries such as Afghanistan and Iran, should consider digital currencies to be legal tender. He suggested that they could use at most a central bank’s digital currency.
“Although it is not necessary for our government spend additional money on a central banking digital currency project, if they do not want decentralized assets, a CBDC might still be an option.”
Money transfer services such as Swift and Western Union stopped operations in Afghanistan after the Taliban took power. This left many Afghans without an income source, who received money from relatives overseas. Cryptocurrency is the only way to get money from other countries.
Afghanistan was ranked 20th out of 154 countries in Chainalysis 2021 Crypto Adoption Index during the crypto boom.
Ali Rahnavard is a local cryptocurrency dealer and trader from Herat, which is one of the most populous cities in Afghanistan. He claims that he has seen a tremendous increase in the number Afghans who use cryptocurrencies. Rahnavard stated that the number of customers he had increased by “tenfolds” over the past year.
Rahnavard explained to Cointelegraph that the main reason for this growth was that people needed to find a means to receive money from family members and friends living in other countries.
Rahnavard claims that it is “much cheaper and quicker” than previous payment systems such as Western Union.
He has been trading for four years and also taught Afghans how to use cryptocurrencies. If the Taliban government in Afghanistan decides to use crypto to allow e-commerce, this knowledge could be very useful.
“Crypto could open the door for the Taliban to return to international business.” He said that while the Taliban do not seem to have the knowledge necessary to use blockchain technology right now, they could at most help by not banning cryptocurrency.
Jumah Mosque in Herat, Aghanistan. View from the Eastern roof. Source: DidierTais
What is the use of crypto in Afghanistan?
Binance announced in November 2021 that Swift bank transfers will no longer be supported for user accounts in countries such as Afghanistan. It was difficult to withdraw or deposit crypto from Binance as most people use it.
Customers can currently get crypto by going to a dealer’s shop to pay in local fiat currency (afghanis) or U.S. dollar.
To get cryptocurrency the dealer must contact an international person to send it to his wallet. To deposit the funds to the sender’s account, the dealer uses the Hawala system in his local area. Rahnavard says that dealers avoid credit and debit cards because they charge 11% to make international purchases.
The dealer asks for the wallet address of the customer and then sends the crypto, mostly Tether ($USDT).
Was crypto banned by the Taliban?
Still, the Taliban have not announced any bans or regulations regarding digital currency. Rahnavard stated that if a leading Islamic scholar declares crypto haram (forbidden), then the Taliban would ban it without thinking twice. He said that if they considered it permissible, “we might use all the best technology in the world forever.”
The low literacy rate in Afghanistan is one of the greatest obstacles to crypto’s widespread adoption. Only 43% of Afghanistan’s people are literate, and even fewer have regular internet access.
Cointelegraph was told anonymously by a crypto trader:
Cryptocurrencies may be our only hope and window to financial freedom. It’s difficult to teach everyone crypto, given all the difficulties we have in Afghanistan. But it is possible.
They said, “What I love most about decentralization”
2001, Turkham, Afghanistan: Taliban border guard
As they sought to alleviate the cash shortage created by US sanctions, the Taliban restricted bank account withdrawals when they assumed power. Millions of Afghans were unable to get food as a result. Many tried to sell their children, which resulted in international media coverage that opened the doors to donations.
Bookblocks.io launched a non-fungible token (NFT), project in September last year. It was also started by the “Women for Afghan Women” organization. They created digital art for the purpose of supporting education in Afghanistan and refugees arriving in the United States.
“This generation grew up optimistic and dreaming about their future via educational opportunities,” Naheed Samadi Bhram, Women for Afghan Women’s U.S. Country Director. “We are committed in serving Afghan women and girls, as well as Afghan refugees who have arrived in the U.S.,”
Fereshteh Fortough, a social activist and entrepreneur has also sent cryptocurrencies to Afghan girls who are in dire need.
Forough is the founder of Code to Inspire, a coding school for girls in Afghanistan. The academy was founded in 2015 in Herat (Afghanistan).
Forough reports that 350 girls graduated from Code to Inspire, and that 65% of them began their careers to provide food for their families. Forough stated, “The girls had texted me to tell me that they all lost their jobs due to the Taliban’s policies.” Their families were crumbling because they were the sole breadwinners.
Forough stated, “We discovered that there are many local money exchanges within the financial district Herat that accept crypto and can cash it out for us in either dollars or afghanis.”
Code to Inspire helped 100 girls to open Trust Wallet and Binance accounts to receive cryptocurrency payments and to exchange digital assets for fiat at a local crypto exchange.
Forough isn’t the only one who helps Afghans get paid with crypto. Roya Mahboob, the CEO of Afghan Citadel Software Company, pays her employees in digital currency. She previously spoke about her role, and was featured because of her commitment to making a difference.
“Young people can learn about computers and learn about Bitcoin. Everyone wants to know how to access Bitcoin. They must.”
Nothing has changed since August 2013, not even Afghanistan’s name, which was changed from Islamic Republic of Afghanistan (now the Islamic Emirate of Afghanistan). Many NGOs fled the country, and many people lost their jobs. This led to a financial crisis, and even worse, starvation.
Some families lived on the only money they could get from abroad. But without cryptocurrencies, it’s nearly impossible to do so.
Rahnavard stated that crypto is a new technology, and other countries are interested in learning how to use it to their advantage. It’s different in Afghanistan. We need to be able to understand crypto and the underlying technology. If we don’t, then I don’t know what greater disaster can be expected.”