The Crypto Clampdown in Herat
In a recent wave of regulatory measures, authorities in the Herat province of Afghanistan have shut down at least 16 cryptocurrency exchanges within the span of just a week. This crackdown follows an ongoing ban on crypto trading, which has been in effect for nearly three months. According to local sources, arrests were also made during these closures, highlighting the seriousness of the enforcement efforts.
The Ban and Its Backstory
The seeds of this crackdown were sown back in June, when the Da Afghanistan Bank, the country’s central bank, announced a ban on online forex trading, citing Islamic law as a basis for their decision. A spokesperson for the bank stated bluntly, “There is no instruction in Islamic law to approve it [online forex trading]. As a result, we have banned it.” This move has since evolved into widespread restrictions on cryptocurrency operations.
Understanding the Local Perspective
Local leaders have expressed their apprehensions about digital currencies. Ghulam Mohammad Suhrabi, the head of the Herat Money Exchangers’ Union, remarked, “Digital currency accounts are outside the country and are purchased from the companies. Our people are not familiar with it, so it is better not to use it.” This sentiment reflects a broader unease among the populace regarding new financial technologies that they don’t fully comprehend.
The Aftermath of the Ban
The situation has escalated to the point where the central bank plans to prosecute individuals who disobey the ban. With the lack of any licenses for online trading, all operations in this sector are classified as illegal. Reports from July indicated that the authorities were gearing up for these legal actions, which could have deep repercussions for the various traders and users involved.
Crypto’s Rise and Its Role in Modern Afghanistan
Following the Taliban’s ascension to power in 2021, there was a notable increase in crypto usage across Afghanistan. The fragile economy, coupled with complications in receiving foreign remittances due to the withdrawal of major financial services like Western Union and Swift, drove interest in cryptocurrency as an alternative financial solution. In a fascinating twist, reports suggested that there was even a WhatsApp group focused on cryptocurrency trading in Herat that boasted a whopping 13,000 members.
Moreover, cryptocurrencies have emerged as a vital lifeline for humanitarian aid, as organizations such as Women for Afghan Women have utilized crypto channels to deliver assistance directly within the country. This new approach offers a glimpse into how digital currencies can provide solutions in the face of traditional financial system failures.
