Source: Adobe /westwildwest
Faced with increasing uncertainty under the Taliban regime, local crypto exchanges in Afghanistan are trying to keep a low profile by removing banners and interacting more conservatively. The U.S.-Led coalition seized control of Kabul, the capital of Afghanistan, on August 19, putting a swift end to nearly 20 years of a U.S.-Led coalition in just ten days. Now, as they prepare to implement a new government, fears of censorship and restrictions are coming to life again.
During the Taliban’s first reign, which spanned from 1996 to 2001, the Islamic movement banned some forms of consumer technology — which at the time was largely limited to music, television and film.
In addition, the Taliban have reportedly banned women from having camera phones in some remote provinces of Afghanistan. While the veracity of the news is not yet known, it has already made people suspicious of what is ahead.
Among them, local crypto traders have also decided to be on the safe side. In addition, they work in person – to buy or sell crypto, a client must be present in person and wait for all transactions to be processed. The deal is in cash and does not require disclosure by any of the parties involved.
The majority of such exchanges in Afghanistan support large cryptoassets such as Bitcoin (BTC) and Ethereum (ETH). However, to circumvent volatility, some have limited their trades to stablecoins such as Tether (USDT).
And now the majority of such exchanges have removed their posters and interact with great caution. They hardly accept new customers and tend to ignore messages when contacted through social media platforms.
“I especially fear Taliban fighters. They are very suspicious of things they don’t understand, and they sometimes trade before consulting with their leaders,” Abdul, owner of a crypto exchange in Herat, told. “If you show up here and ask me what I’m doing, I’m afraid I wouldn’t be able to convince you.”
Abdul says that the Taliban could take over cryptocurrencies, but you have to understand it first.
“They [Taliban] have not addressed crypto so far, and I don’t expect they will soon,” Sayed, CEO and founder of a crypto exchange in Kabul, told.
“Crypto should be your last concern. There is Daesh [ISIS], the Resistance [NRF] and a worsening economic crisis. These questions have a greater significance.”
However, the CEO says he is concerned about whether the Taliban would consider cryptoassets as Haram (not compliant with Sharia law). “Many Muslim scholars have presented their perspective [fatwa] regarding cryptocurrencies, explaining that it is Halal. But the Taliban may refuse to accept these prospects”he said.
In Islamic theology, only objects with intrinsic value are tradable. If a scholar believes that cryptoassets have value in and of themselves, and are not just imaginary currencies with no use cases, they would declare them halal.
Decentralized cryptoassets have intrinsic value because they offer a utility: they allow the permissionless and limitless flow of data and values. However, to truly understand this, scientists need to look closely at how the underlying technology — blockchain — works.
Sayed estimates that if the Taliban were to study cryptoassets and understand their benefits, they would not prohibit people from using them.
“For the isolated people of Afghanistan, crypto provides a means of interacting with the world,” he said.
Crypto: for and against the Taliban
Afghanistan has one of the fastest rates of adoption of crypto, according to US-based blockchain analytics firm Chainalysis. In its 2021 Global Crypto Adoption Index, it ranked 20th out of 154 countries in terms of crypto adoption.
While Afghans are adopting cryptoassets to deal with a worsening financial crisis, the Western world estimates that the Taliban will use these virtual assets to circumvent sanctions. The Wall Street Journal reported in September:
“If the Taliban were to adopt cryptocurrency as part of a national economic policy, it could support efforts to circumvent some Western sanctions and other levers against the country’s new rulers, some former U.S. Officials and security experts say.”
At the end of August, Charles Hoskinson, founder of Cardano (ADA), said that the adoption of crypto in Afghanistan will gain momentum, especially to close the privacy gap, which can easily put people’s lives at risk. However, Hoskinson mentioned that the Taliban can also take advantage of crypto’s openness.
“I believe cryptocurrencies will play a bigger role this time around in Afghanistan, in the war for and against the Taliban,” Hoskinson said.