The Taliban takeover of Afghanistan has had a “huge chilling effect” on the local cryptocurrency marketbringing it to an effective “standstill,” according to a recent report.
Blockchain analytics firm Chainalysis, in a report on Oct. 5, stated that the Middle East and North Africa (MENA) region was the fastest growing cryptocurrency market in 2022, but noted that Afghan crypto traders had three options: “flee the country, stop trading, or risk arrest.” “.
The report states that after the Taliban seized power in August 2021, the value of crypto received in August and September of that year soared to a peak of over $150 million, only to drop sharply the following month.
Before the seizure of power, Afghan citizens received an average of USD 68 million per month in cryptocurrenciesmainly used for remittances. That figure has dropped to less than $80,000 after the inauguration..
Afghanistan ranked 20th in the 2021 Chainalysis Cryptocurrency Adoption Index, released in October 2021but is now at the bottom of the list following the Taliban takeover.
The reestablishment of the Ministry for the Propagation of Virtue and the Prevention of Vice, in charge of enforcing Islamic law in the country, is the reason for the change. Chainalysis explains that the agency equated cryptocurrencies to gambling, declaring them haram, that is,prohibited under Islamic law.
A large part of the activity that still takes place in the country comes from money laundering from illicit sources such as bribes or drugs.an anonymous source quoted Chainalysis.
LThe person added that only a “small part” corresponds to “young people who have a few hundred dollars” to day trade digital assets..
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.