Crypto Market Flatlines Under Taliban Rule

The crypto market in Afghanistan has grinded to a halt after the Taliban took power according to a recent report by blockchain analytics firm Chainalysis titled “Middle East & North Africa’s Crypto Markets Grow More Than Any Other Region in 2022.”

The report, dated Oct. 5, noted that Afghani crypto exchanges had only three options at this time: stop operating, flee the country, or risk getting arrested.

From $68m to $80k a month post-takeover

According to the report, the value of crypto received in the two months following the takeover by the Taliban last year peaked to over $150 million. The next month, it plummeted.

Citizens of the country would get $68 million per month in crypto on average, which they mainly used to make payments. After the Taliban came to power in August 2021, the figure began to decline. It is currently less than $80,000 a month.

Afghanistan ranked 20th in the analyst’s crypto adoption index, published in October 2021. After the change in power, it’s at the bottom of the list.

Crypto equated with gambling

The Taliban reinstated the so-called Ministry for Prevention of Vice, which is responsible for implementing Islamic law in Afghanistan. The ministry equated cryptocurrency with gambling, which Islamic law bans.

Chainalysis cited an anonymous source as saying money laundering from drugs, bribes, and other illegal sources still comprises the bulk of activities undertaken in Afghanistan.

A very small part of activity comes from crypto trading, the individual added. This is from “young people who have a few hundred bucks” for day trading. Regrettably, it seems the future of crypto in Afghanistan will only get bleaker.