After the fall of the Taliban in Afghanistan, US sanctions, bank cuts, cuts in foreign aid and cash transfers affected Afghanistan’s economic system. In such cases, bitcoin or digital money has become the solution.
Farhan Hotak, 22, is a resident of Zabul province in southern Afghanistan.
He had no cash after the fall of the Taliban and his only assets were Bitcoin digital money, which he kept in a virtual wallet worth several hundred dollars.
Hotak was able to repatriate his family of ten to Pakistan by cashing in on the digital money.
“After the Taliban came to power, digital money spread rapidly across Afghanistan, there was no other way to get the money,” he said.
Mr. Hotak, along with his colleagues, uses the ‘P2P’ exchange in the Bainness application, which allows them to buy and sell money directly to other users of the platform.
After finding a temporary residence in Pakistan, Hotak started trading in bitcoin.
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He is now traveling to Afghanistan, teaching people the value of digital money through videos and the value of digital money without physical presence.
Proponents of cryptocurrency say digital money is the “money of the future” and reduces people’s reliance on banks.
Banks are closing down, forcing people to turn to digital money not only for business but also for survival.
Bitcoin and other cryptocurrencies have been the most sought after currency in Afghanistan since the Taliban took power in July 2021, according to Google Trade data. This was the time when people stood in queues to withdraw their money from banks and walked around empty handed.
After the Taliban came to power, the use of cryptocurrencies in Afghanistan increased rapidly.
Last year, Afghanistan was ranked 20th out of eight countries in the world that use digital money, according to the findings of the digital company China Alice.
But just a year earlier, in 2020, the company had underestimated the presence of digital currency in Afghanistan and even removed Afghanistan’s name from the list.
Sanjar Afghan is a clay Afghan-American who created the ‘Account Pay’ application in 2019. This application helps Afghans to transfer money using cryptocurrencies.
He says the “grappo revolution” in Afghanistan is the result of US sanctions against the Taliban and the Haqqani network, which are now in power.
Sanctions have led to a complete shutdown of banking transactions in Afghanistan. The United States has frozen 2.1 billion in Afghanistan’s central bank and cut off money transfers. Companies in Poland and France that had been awarded contracts to print Afghanis have also stopped sending money to Afghanistan. The International Monetary Fund (IMF) has suspended all its services in Afghanistan.
Afghanistan, devastated by war and with 80 percent of its gross domestic product dependent on foreign aid, is currently in a state of collapse.
“22.8 million Afghans are starving, one million of them children who may die of starvation in winter. We want to use digital money to solve this problem,” said Mr Kakar.
An application like Kakar’s ‘Account Pay’ allows you to transfer money directly from one phone to another without resorting to banks, the Afghan government or the Taliban.
In the first three months of its launch, the application managed to conduct currency transactions more than 2.1 million times and has 380,000 active users.
Donors are also now realizing the potential of digital money in Afghanistan.
In 2013, Roya Mahboob set up a non-governmental organization called the Digital Citizens Fund or DCF to provide computer programs and financial and economic education to Afghan women.
The organization had 11 information technology centers for women in Herat and two more in Kabul, teaching 14,000 women everything from Windows software to robotics technology.
After the Taliban came to power, they continued their efforts in the virtual world and taught digital money through the Zoom app.
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Ms Mahbooba told the BBC: “For the past six months, digital money has been vital to Afghanistan. Everyone is talking about business. Quinn and Bitcoin were talking. ”
Although digital money is the best way to do business, there are barriers that make it difficult for Afghans to access digital money.
Although the Internet is developing in the world, it is less accessible in Afghanistan.
The number of Internet users in Afghanistan in January 2021 was 8.64 million, according to DataReporter.com.
Electricity is another problem in this country that challenges the use of digital money.
The Taliban administration has been accused of failing to pay electricity bills to Central Asia and crippling the banking system.
