Kabul, Afghanistan/Mohammad Husaini via Unsplash
Afghanistan’s central bank imposed a nationwide ban on cryptocurrencies this month, and the Taliban regime has arrested several traders who defied orders to stop trading tokens, according to a senior police official.
The crackdown came after some Afghans turned to cryptocurrencies to preserve their wealth and keep it out of reach of the Taliban. The alternative has become a popular way of moving money in and out of the country, which is out of the global banking system due to sanctions.
Countries like Singapore, the US and South Korea are tightening regulations on the crypto industry after the market collapse, which destroyed an estimated $2 trillion in wealth, and drove several high-profile companies into bankruptcy.
Even though outright bans are much rarer, Afghanistan now joins China, which declared all crypto transactions illegal in September 2021.
Speaking to Bloomberg, Sayed Shah Saadaat, head of criminal investigations at police headquarters in Herat said:
“The central bank has given us an order to prevent all traders, individuals and entrepreneurs from trading fraudulent digital currencies such as what is commonly called Bitcoin.”
According to Saadaat, 13 people were detained, although most of them were later released on bail. In addition, more than 20 companies linked to cryptocurrencies were also closed in the city of Herat, the third largest city in Afghanistan.
Last year, a report by research firm Chainalysis ranked Afghanistan as one of the top 20 countries in the world in terms of crypto adoption. The results were weighted by purchasing power parity per capita, which favors the poorest nations.
The Taliban in February said they would study whether tokens can be allowed under Islamic financial practices, as they were looking at all options to revive the economy, which collapsed after the withdrawal of US forces last year, paving the way. for the Taliban to take control.
Some religious scholars have long predicted that the Taliban would eventually ban cryptocurrencies because it is considered “haram,” or forbidden to Muslims because it has elements of gambling and uncertainty.
However, other Muslim-majority countries have taken a more lenient approach. For example, the UAE allows the use of crypto in the Dubai free zone.
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