Bitcoin, Crypto Represent Hope and Despair Amid Afghanistan Carnage
As the bloodbath in Afghanistan continues almost unabated following the fall of Kabul, crypto advocates both inside the country and out are beginning to wonder if tokens like bitcoin (BTC) could help them fight back against the violent and oppressive rule of the Taliban.
The world has looked on in horror in the past few weeks as events unfold with brutal alacrity. But in among the tales of human tragedy and woe are glimmers of hope that decentralized, digital tokens could become a tool for those fighting back against the Taliban.
CNBC reported on the tale of Farhan Hotak, a 22-year-old Afghan crypto trader with a “crypto portfolio” hosted on the Binance exchange.
Although the media outlet recounted that Hotak’s “crypto wallet won’t help him put dinner on his table tonight,” it nonetheless provides him with “peace of mind that some of his wealth is safeguarded against economic instability.”
What is more, the report’s authors noted, crypto “also offers bigger promises down the road,” in the form of “access to the global economy from inside Afghanistan” and “certain protections against spiraling inflation.”
Google Trends data shows that searches for terms like “cryptocurrency,” “bitcoin” and “Binance” have spiked at various points over the summer. This is both true of English-language searches in the nation, and also of languages like Persian: Here “bitcoin” and related terms have also seen similar spikes.
The same media outlet reported that runs on the local currency have seen banks shuttered, in addition to the closure of branches of the money transfer firm Western Union. There has also been a collapse in the “centuries-old hawala” system of personal contact-powered cross-border remittances. It is in situations like these that crypto – when accessible – has thrived.
In Cuba, an entire industry has grown out of bitcoin-powered remittances, often facilitated by independent brokers shuttling cash around the country on bicycles in exchange for BTC and commission fees.
Some crypto enthusiasts are casting an eye elsewhere in the Americas, concerned that fiat inflation will eat up their savings.
“If a government isn’t formed quickly, we might see a Venezuela-type situation here,” warned another Afghan crypto trader.
Regardless, the parallels with Cuba and Venezuela may end there. The latter has full-on embraced crypto as a means of evading international sanctions – a fact that has left its leader sitting on a huge stash of BTC and altcoins. The nation has even released its own oil-backed token, Petro.
And in a possible Castro-meets-crypto scenario, Cuban leaders have hinted that they too could turn to crypto to solve their financial troubles. It would be hard to imagine the Taliban following suit, given the fact that many Islamic leaders claim that in many cases, mainstream tokens are not Halal.
But in a world where communist nations are apparently prepared to turn to crypto, stranger things have happened.
For most in Afghanistan, though, crypto activities are something that most people want to keep well under the radar.
Hotak explained that “the crypto community in Afghanistan is very small,” adding that “everyone just wants to stay hidden until things are nice.”
But data from the Chainalysis-compiled 2021 Global Crypto Adoption Index shows that Afghanistan has risen from nowhere to hit Number 20 out of 154 countries. In 2020, adoption rates were so tiny, the nation did not even make the list. Analysts report that much of this adoption is among peer-to-peer traders.
Ironically, some have pointed out that the United States could end up snuffing out this crypto “underground” with suffocating measures aimed at controlling the flow of capital to the Taliban.
A recent Reason article from Andrea O’Sullivan, the Director of the Center for Technology and Innovation at the James Madison Institute, pointed out that “the ascendancy of the Taliban could provide another justification for more controls on cryptocurrency,” a move that could “hurt” “innocent Afghans.”
“It will only take one story of a possibly Taliban-aligned actor using bitcoin for anti-cryptocurrency actors to pounce. But using digital cash to protect privacy and security should be seen as a fundamental human right, and we should defend it with the equivalent fervor.”
Talk of a rise in terrorism and drug trafficking has set alarm bells ringing beyond Washington, however. Reuters (via Yahoo Finance) has reported that the Russian and Chinese leaders Vladimir Putin and Xi Jinping have spoken about the need to “step up efforts to combat the threats” of narcotics and terrorism.
As many world leaders have been keen to point the finger at BTC and other tokens, a concerted international crackdown on crypto is not inconceivable.
After all, a BBC report this week made note of the fact that “opium poppy cultivation in Taliban-held areas has risen” since the group was last in power.
Furthermore, 80% of the world’s opium supply comes from Afghanistan, although the Taliban leadership has claimed it “will bring opium cultivation to zero” – despite the fact that the crop currently accounts for 11% of the country’s economic output.
For would-be crypto entrepreneurs, though, the Taliban’s regime has proven too fearsome to stomach – leading many bitcoin businesspeople in the making to flee the country, leaving their “dreams” in tatters.
Reuters reported on a computer science graduate in his twenties named Muhammad Ali: a budding crypto and finance YouTuber with mining dreams.
“I was planning a bitcoin or ethereum (ETH) mining business. Suddenly everything changed and the Taliban took over all of Afghanistan.”
A day after speaking to the news agency, Ali, who had been hiding out in a “drainage tunnel outside the Tatvan district of Turkey’s eastern Bitlis province” with 50 other Afghanis, texted Reuters to state that he had been “arrested by police” hunting illegal migrants.
Still-small voices of positivity continue to make themselves heard, however.
Roya Mahboob, the CEO and founder of the Herat-based app developer Afghan Citadel Software Company claimed in an interview with Bitcoin Magazine that BTC “could have helped many other Afghans over the past few weeks – whether they fled and needed to take their savings with them, or stayed and needed an alternative to the [fiat] afghani.”
Mahboob, the report added “remains committed to teaching as many people as possible about it in the coming years,” with the CEO claiming resolutely that when it comes to financial matters at times of crisis:
“Bitcoin fixes this.”
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