Afghans are embracing bitcoin as the country plunges into financial chaos. Cryptocurrency remittances are crucial for the livelihood of People residing in Afghanistan.
The banking infrastructure in Afghanistan is in shambles. International payment institutions like Western Union have also halted their services. In this situation, Afghans have become dependent on cryptocurrencies.
After the Taliban’s take over of the country, financial operations ceased with banks freezing foreign reserves. Newspapers published pictures of thousands of Afghans standing in line outside banks waiting to withdraw cash.
These difficult times forced people in the country to search for alternatives and cryptocurrency was the answer. The average Afghan can easily send or receive money using the fast network of cryptocurrency.
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Afghanistan’s economy is highly dependent on remittances, that is the money sent ‘back home’ by expatriates. Remittances make up to 4% of the country’s GDP and Crypto is revolutionizing the process.
Joshua Jahani, a Board adviser at the investment bank, wrote in his piece in TechCrunch:
“..Afghanistan may be the most urgent and tragic case of why the Global South needs crypto. As cash becomes scarce, prices soar and as the Taliban loses the foreign aid the country was previously dependent upon, the already crumbling afghani currency will get even weaker. By allowing the Afghan people to receive, store and spend their wealth in bitcoin, they may be able to protect themselves against the worst effects of a failed state.”
Afghans are embracing Bitcoin at a rapid pace. According to Chainalysis, the crypto data firm, Afghanistan has the 20th spot on the list of 154 countries in the Global Crypto Adoption Index. The country was not even on the list in 2020.
Crypto adoption is swift in countries that suffer from economic collapses. It is evident that bitcoin may not be perfect but it is a worthy alternative to fiat in many cases.