Afghan citizens are turning to stablecoins to protect their finances as fears of Taliban crackdown on funds rise.
Citizens are concerned that the Taliban will seize assets, which will worsen an already collapsing economy. And the focus of his investment is not bitcoin, but stablecoins.
The idea is to have their assets pegged to fiat currencies. Officials from the country’s crypto exchanges note that demand is high, and people are no longer depositing money in cash or jewelry, preferring crypto.
Afghan citizens also say the Taliban are raiding homes and confiscating goods, leading to the switch to cryptocurrencies. Reports from earlier this year also confirm this mass adoption of crypto. Some people in Afghanistan have used their crypto holdings to flee to Pakistan.
US freezes $9 billion in foreign exchange reserves, economy is on the verge of collapse, people are only allowed to withdraw $400 a week
Afghanistan ranked in top 20
In 2021, Afghanistan was ranked 20th out of 154 countries in Chainalysis’s Crypto Adoption Index, one of the many countries facing economic problems. Exactly a year ago, the company considered Afghanistan’s crypto presence so low that it didn’t even rank.
This is not the first time citizens of a country have resorted to crypto to protect their finances. Venezuela and Argentina are among the most cited examples of crypto helping the country’s citizens. Both countries have experienced an increase in crypto usage following the economic downturn.
And in Myanmar, the government-in-exile has recognized Tether as an official currency as it seeks to finance a campaign to topple the military junta that seized power last year.
Ukraine has received donations of tens of millions in the form of cryptocurrencies. Crypto has proven to be a lifeline for millions and can be an effective way to fight oppression and economic hardship.