As the Taliban seized power in Afghanistan, the economy is facing a major crisis since the US-backed government fell apart. In such circumstances, Afghans are investing their funds in cryptocurrency to seek economic stability. They feel the crypto market is a safer place for their funds to be kept.
Afghanistan is now facing restrictions in traveling as the Taliban sealed the border to prevent citizens of the country from fleeing. The Afghani currency is suffering a depletion in value, the scale of inflation continues to rise; they are even facing a cash shortage. In such flashes of grilling economy, the cryptocurrency market proved to be the perfect sought-after solution for Afghans.
The western unions have suspended all services, the people are running out of all sorts of resources including cash. Afghans are turning to cryptocurrencies such as bitcoin as a financial refuge.
Some people who are leaving the country are using their crypto wallets to carry their money with them, others use their crypto to stay put.
Bitcoin rates are facing a bearish market after it rallied up to rates of $50,000 after almost three months. Some crypto investors aren’t just looking for profit, in Afghanistan citizens are purchasing cryptocurrency to safeguard their money while fleeing the Taliban overtook the country.
Those citizens staying in Afghanistan see cryptocurrency investment as a sought-after solution to avoid suffering bank runs and feed themselves. They are turning to cryptocurrencies that incur minimum risks in the volatile market and exist for a long time, such as – Bitcoin, Ethereum, and Litecoin.
In Afghanistan, cryptocurrency investment wasn’t a popularly perceived prevailing concept. It emerged recently, and the country has witnessed this adoption of cryptocurrency and digital asset investment majorly in 2021.
According to data from Chainalysis 2021 Global Crypto Adoption Index, Afghanistan ranked 20th out of 154 countries in cryptocurrency investment volume. Considering the peer-to-peer (P2P) exchange trade volume, Afghanistan has stepped up to 7th place, as per the report. This is a major development in the sector of cryptocurrency and digital assets, since 2020 – then the country didn’t even have its name on the list.
Due to the fear of economic crisis that awaited their expectations, due to the aggravating political scenario, more people started acknowledging and utilizing the application of cryptocurrency investment.
Afghans Using Cryptocurrency Investment as a Way to Deal with Economic Crisis
On August 24, 2021, the CNBC After Hours reporter MacKenzie Sigalos elaborated on this matter.
A 22-year-old Afghan, Farhan Hotak who lives in a rural part of the country – a village called Zabul. He is among the cryptocurrency investing community in Afghanistan who will be spared from the majorly getting affected by the economic crisis in the country that aggravated after the Afghanistan government was overthrown by Taliban coup.
He kept his finance actively running, by keeping a close watch on his crypto wallet and day-trading digital coins, such as Dogecoin. Hotak told CNBC, that despite there is limited resources and knowledge regarding cryptocurrency in Afghanistan, “I have very, very, very limited resources to do anything. I’m interested in the crypto world, because I have earned a lot, and I see a lot of potential in myself that I can go further.”
Another Afghan who was spoken with on CNBC, 27-years-old Musa Ramin also used cryptocurrency investment as a legitimate way to earn money. He said he can earn more money by trading cryptocurrency in a month than in construction in a year.
They say “It’s a safer store value than the local currency.”
As these data seem promising, Afghanistan is still a long way away from its “mass adoption of cryptocurrency.” The country has limited access to the internet, suffers consistent power outages and a vast majority of the country’s population doesn’t have access to the global economy as they don’t possess any bank accounts.