Cryptocurrency usage surged in Afghanistan, after Western Sanction on the country

 The use of cryptocurrencies has surged in Afghanistan, as traditional financial systems fail amidst the Taliban's takeover of the country. As the Taliban's seizure of the nation's capital Kabul grew increasingly likely over the summer, Afghanistan's central bank withdrew hard currency reserves from its vaults.

Subsequently, the U.S. halted shipments of dollar bills, while local banks imposed capital controls.

Due to Western governments, banks and money-service businesses cutting off access to other forms of finance, Afghans have increasingly come to see cryptocurrencies as a safe place to store their funds, providing a small but critical financial lifeline.

This rise in cryptocurrency usage over the past several months has lifted Afghanistan into the top 20 of the 154 countries ranked in the 2021 Global Crypto Adoption Index. Last year, Afghanistan ranked among the lowest on the index published by crypto analytics firm Chaninalysis in August. Chainalysis ranks countries by the growth in the volume of crypto trading while adjusting for the population's purchasing power.

Meanwhile, some Afghans who were early investors in cryptocurrencies have been able to use the profits to safely evacuate their family and friends. Over the past decade, Roya Mahboob, a founder of the non-profit digital Citizen Fund along with her sister, taught thousands of girls and women basic computer skills at their centres in Herat and Kabul. They also facilitated financial services, as most girls and women lacked a bank account because they were prohibited, or because they lacked the documentation.

However, as Afghans use cryptocurrency to transfer their funds out of the country, there is the additional risk that the Taliban could adopt them as part of a national economic policy, in an effort to circumvent Western sanctions.

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