- The country’s central bank banned cryptocurrencies a month ago.
- Severe economic sanctions were imposed on Afghanistan.
The Taliban begins targeting anyone who deals in cryptocurrency. Bloomberg reports that the Taliban government in Afghanistan is arresting cryptocurrency traders who continue to operate after being told to stop. One month after the country’s central bank banned cryptocurrency, the authorities began cracking down on crackdowns.
Syed Shah Saadat, Head of Criminal Investigation at Herat Police, said:
“The Central Bank has instructed us to stop all money changers, individuals and businessmen from trading fraudulent digital currencies such as what is commonly referred to as Bitcoin.”
Encryption in demand due to penalties
Herat, the third largest city in Afghanistan, is home to four of the country’s six cryptocurrency exchanges. According to Saadat, 13 people were arrested and 20 cryptocurrency companies were shut down in the city.
Prior to the ban on all cryptocurrencies by the Central Bank, there was a huge demand for cryptocurrencies in Afghanistan, especially stablecoins. They provide clients with a protected place to store capital and a mechanism to transfer funds locally or internationally. Stable currencies are digital currencies that are designed to maintain a stable value in relation to a fiat currency such as the US dollar or the euro.
Severe economic sanctions were imposed on Afghanistan during the 1990s. Shortly after the Taliban regained control of Kabul and returned to power, the Biden administration imposed further sanctions and seized nearly $7 billion in Afghan treasury assets in New Fed York.
There are many countries that have strict regulations on cryptocurrency, and not just Afghanistan. Preserving the value of the currency was one of the priorities of the Russian president vladEmir Putin, which recently approved a bill that would make it illegal to use cryptocurrencies for financial transactions. In the summer of 2021, China specifically banned the use of cryptocurrencies and bitcoin mining.
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