- The Taliban has banned 16 cryptocurrency exchanges in the province of Herat.
- The use of cryptocurrency gained popularity after the Taliban came into power.
- Earlier in June, the central bank banned the use of foreign exchanges in Afghanistan.
On Thursday, August 25, at least 16 cryptocurrency exchanges in Afghanistan’s Herat province were shut down, while several people were arrested. The decision comes three months after Afghanistan declared a ban on foreign exchanges in the country.
Reportedly, the use of cryptocurrency gained popularity after the Taliban came into power last year. After the Taliban’s takeover, the financial situation of citizens crumbled as foreign aid ceased and US sanctions froze its foreign assets. This made people gain interest in cryptocurrencies, but the sanctions made it difficult for the locals to buy digital assets.
Syed Shah Saadat, the head of the police crime-fighting unit in Afghanistan, stated that the central bank has banned cryptocurrency trading because this practice has led to problems and fraud. Saadat said that all the people involved in the local crypto business have been arrested and their stores have been shuttered down. The names of the crypto exchanges affected by the ban have not been determined as of now.
Earlier in June this year, the Taliban-led central bank of Afghanistan banned online forex trading, declaring it against Islam. The bank’s spokesperson added that anyone indulging in such activities will have to face prosecution.
Afghanistan is not the only one to ban the trade of cryptocurrencies. Some other countries that have banned cryptocurrencies are Algeria, Bolivia, India, Iraq, Kosovo, Nepal, North Macedonia, Russia, Turkey, and Vietnam. In 2021, The People’s Bank of China issued a ban on all cryptocurrencies. The move was made in order to curtail financial crime and prevent economic instability.