Since the Taliban took control of most of the country, Afghans have been using Bitcoin to store and exchange values. On August 15, hundreds of residents of Kabul, the country’s capital, rushed to banks to withdraw money as Taliban fighters captured the city and demanded the government’s surrender – but only to crash into a wall. Cash shortages, severe restrictions, and an ever-depreciating local currency have led Afghans to look for alternatives and find Bitcoin.
“A nationwide cash shortage, closed borders, a local currency hitting record lows, and rapidly rising prices for basic goods; so some Afghans I’ve spoken to are turning to cryptocurrencies like bitcoin, ”said MacKenzie Sigalos of CNBC.
According to CNBC and data from Chainalysis, because of their digital nature, cryptocurrencies have been the most sought-after solution for those looking for some monetary sovereignty to flee the country. Some Afghans have chosen Bitcoin to protect their money, build and maintain wealth, and gain high levels of sovereignty in order to flee the country with their savings. Others have played with cryptocurrencies and desperately tried to raise their incomes during Afghanistan’s current crisis.
Afghanistan has seen increased adoption of Bitcoin despite significant obstacles that its citizens often face, such as limited access to the internet and frequent power outages. Afghanistan ranks 20th among 154 countries analyzed by Chainalysis’ global Bitcoin Adoption Index 2021. The index, which takes into account the purchasing power parity (PPP) of each country per capita as a weighting factor, mainly takes into account Bitcoin usage by ordinary people and not by institutional and professional actors. In peer-to-peer trading, Afghanistan ranked even higher, taking seventh place.
Over time, Bitcoin can maintain value and increase purchasing power better than national fiat currencies and other cryptocurrencies. With a limited supply and predictable monetary policy, the world’s only peer-to-peer electronic money is in a unique position to help the unbanked, those under authoritarian regimes, and those facing adverse economic policies and currency devaluation . With Afghans being denied access to their rightful fiat savings due to a lack of cash, some have already begun to familiarize themselves with Bitcoin and allocate their family savings to the most tangible form of money they can access. Bitcoin is the definitive answer to help them secure financial sovereignty and preserve wealth for generations to come.
