Afghans apparently began using BTC to overcome some of the possible restrictions imposed by the Taliban regime.
Liquidity crisis after the Taliban took power
After the Taliban came to power, there is increasing speculation that a real liquidity crisis could occur in Afghanistan.
The main problem lies in the fact that the central bank’s monetary reserves of about $ 9 billion are held abroad and have already been frozen due to a plan by Western forces to block resources that the Taliban could draw on the country’s administration. Afghanistan’s total GDP is about $ 20 billion.
International financial assistance, which accounts for up to 43% of the country’s GDP, has also been blocked, exacerbating the problem. This could cause a liquidity crisis and the new government could decide to solve the problem by using citizens’ savings.
The Afghans are afraid that they will lose money and have already started running to the banks to withdraw as much cash as possible. Another risk is that banks will not have enough cash or the new regime could even impose restrictions on withdrawals or capital movements on its own.
Afghans resort to BTC
In such a case, it is not surprising that the recent global index for the adoption of the cryptocurrency Chainalysis for 2021 found a real increase in the adoption of BTC in the country. Afghanistan suddenly jumped to 20th place out of 154 countries analyzed in terms of the cryptocurrency acceptance index. Country didn’t even get on the list last year.
Platforms used in Afghanistan to exchange BTC
In particular, volumes on peer-to-peer platforms skyrocketed, and in this respect, Afghanistan came in seventh ahead of countries such as Nigeria and Colombia.
These platforms allow individual buyers or sellers to trade directly with other individual sellers or buyers. Therefore, it is speculated that the leap in the use of BTC and cryptocurrencies in Afghanistan is mainly due to the citizens, not the Taliban regime.
The sellers are therefore probably other Afghans who own BTC and agree to sell them in exchange for the local currency.
Google’s trends also show a sharp increase in searches for the word “BTC” in Afghanistan between late June and early July, when the prospect of regaining Taliban power began to emerge.
Afghans who want to escape the restrictions that the new regime could impose on the free movement of capital, or who want to prevent the Taliban from using their savings, find in BTC an excellent ally that protects their money from government action. It also allows them to easily send and receive money from abroad.