According to reports, Afghan law enforcement agents have closed up to 16 cryptocurrency platforms in the western province of Herat. This is happening three months after the current Taliban government imposed a ban on all digital asset trading activities. Already, the change in the political administration in Afghanistan last year caused serious economic uncertainty in the country. Interestingly, the instability pushed locals to convert their fiat currencies into cryptocurrencies and digital assets.
A recent report also disclosed that Herat police officers halted the operations of up to 16 cryptocurrency trading venues in Afghanistan’s second-most populous province. The authorities’ actions followed the central bank’s negative stance on the digital asset ecosystem. It argued not long ago that crypto trading “has caused lots of problems and is scamming people,” therefore, it should be limited.
Herat Money Exchangers’ Union also supported the decision to close down the platforms. According to the Union, criminals often scam citizens through cryptocurrency trading, relying on the knowledge that majority of Afghanistan’s population does not have sufficient financial education. This makes it easy to become a victim of a fraudulent scheme.
Speaking on the matter were some residents of Herat. Shahram classified the cryptocurrency ecosystem as a “new phenomenon” that is not advanced in Afghanistan. As such, the government needs to monitor it to protect investors. Mawla Alizada also holds a similar stance. In her view, cryptocurrency firms are mostly run by criminals. This is why she supports the government’s decision to ban cryptocurrency trading in Afghanistan.
Afghanistan made headlines in August 2021 when the Taliban (a political and religious faction) took control of the countrys administration. The Western World (led by the United States) was unhappy with the civil war created by the new government to regain power and imposed heavy financial sanctions on the Taliban nation.
As a result, Afghanistan (which was already one of the poorest nations) sank into deeper crisis. The resulting panic pushed some of its residents to look for alternatives to preserve their wealth and a chunk of them shifted their focus to cryptocurrencies and stablecoins. This was surprising because the citizens of the Asian nation previously relied on jewelry, precious metals, and cash during turbulent periods.
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