In Afghanistan, cryptocurrencies offer an escape from the crisis

In the heart of a bazaar in Herat, Arezo Akrimi takes out his smartphone and exchanges his cryptocurrency for a wad of banknotes. An unexpected way for this young Afghan to finance the survival of her family, in a country in the midst of economic sinking.

Arezo, 19, is one of around 100 students who have been receiving $200 – around €180 – a month in cryptocurrency since September in this town in western Afghanistan, thanks to the American NGO Code To Inspire.

This sum, which she converts at an exchange office into afghanis, the local currency, is crucial to pay the rent and feed her family of six. Alone, her civil servant mother no longer has a job since the Taliban excluded most women from the civil service.

Since the Islamist fundamentalists came to power in August, Afghanistan has seen its economy collapse and unemployment soar, in particular because of the immense liquidity crisis caused by the freezing of billions of assets held in the foreigner.

But digital currencies and their decentralized architecture, impervious to international sanctions, allow a handful of young people to escape the doldrums.

“It was really very useful,” smiles Arezo. “It was very surprising for me to learn that it could be used in Afghanistan. »

This emergency solution allows Code To Inspire, an organization originally founded to teach computer programming to women in Herat, to directly help its students despite international sanctions.

Due to the freezing of assets, Afghan banks closed for several weeks after the return to power of the Taliban and have limited withdrawals since their reopening, creating long queues in front of ATMs. Bank transfers to Afghanistan are almost impossible, to prevent the funds from falling into the hands of the Islamists.

– “Overcoming the sanctions” –

Cryptocurrency transfers, operated outside the banking system using blockchain technology, a kind of book of accounts known to be tamper-proof, enabled the NGO to circumvent these obstacles while ensuring that each donation was well received. by the young women targeted, its founder, Fereshteh Forough, told AFP.

“Crypto is an incredible way to overcome all kinds of political and economic sanctions, but also a tool capable of changing the lives of people who live in an authoritarian regime,” said the American, whose parents fled Afghanistan in the 1980s.

To guarantee the financial security of its students, the NGO avoids paying them in bitcoins, the most famous cryptocurrency whose price regularly plays a roller coaster. It favors the “BUSD”, a “stablecoin” whose price is backed by the dollar.

“A BUSD is a dollar,” summarizes Ms. Forough.

Beyond this humanitarian initiative, cryptocurrencies are gaining followers in Herat with the crisis, according to Hamidullah Temori.

In its exchange office, which accepts these decentralized currencies, the broker has seen an influx of new customers over the past six months, many of whom regularly come to convert cryptoassets sent by relatives from abroad into hard-eared Afghanis.

“Since the Taliban ruled, transfers (of cryptocurrency) to and from abroad have increased by 80%,” he says.

“Cryptocurrency is more convenient,” adds the 26-year-old financier. Transfers are instantaneous and commissions are much lower than using Western Union or hawala, the over-the-counter money transfer system traditionally popular with Afghans.

In Kabul, Noor Ahmad Haidar also converted by force of circumstance. The young man, who started exporting saffron to the United States, United Kingdom, Australia and Canada in early 2021, has had 90% of his orders paid for in bitcoins since the change of regime.

“I avoid going through the chaotic process of bank transfers. Since August, it has really become the only option available, and the most practical for me,” he says.

– ” Take risks ” –

This nascent craze was noted by the firm Chainalysis in its 2021 global ranking on the adoption of cryptocurrencies, which places Afghanistan in twentieth place out of 154 countries. The country was previously among the last.

“I don’t think it’s just in response to the Taliban taking over,” says Kim Grauer, the firm’s research director. “It’s also because we’re at a time when there are more options to trade cryptocurrency on your phone and more people understand what it’s all about. »

While the momentum is on the rise, the volume of trade remains very low, and will remain so because of the lack of access to the Internet and the high level of illiteracy in Afghanistan, she recalls.

More than 10 of the 38 million Afghans cannot read, according to the latest figures from Unesco.

But for those who can venture into this universe, cryptocurrencies are a lifeline.

Alongside his studies, Ruholamin Haqshanas writes from Herat for media based in India, specializing in new technologies.

Since the advent of the Taliban, his salary, entirely paid in stablecoins, allows him to cash in on galloping inflation and the free fall of the Afghani, which in January had lost 35.6% of its value against the dollar in one year, according to data from the World Food Program (WFP).

“Stablecoins offer very good protection against the loss of value of the currency”, judges this 22-year-old student, who now earns more than his doctor father.

The young man is also trying to speculate on some more volatile cryptocurrencies, thanks to the advice of a WhatsApp group which brings together 13,000 members in Herat.

Also a student, Parisa Rahamati earned $600 in February betting on the price of decentralized currencies like Ethereum and Avax. Unexpected income that she shared with her mother, widowed and unemployed.

“You have to be willing to take risks,” says the 22-year-old. “Crypto is 50/50, you can double your bet or go down to zero. »

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