Bitcoin adoption in Afghanistan has skyrocketed over the past year amid the economic turmoil sparked by the Taliban’s takeover of the country, according to a new study.
Afghanistan is ranked 20th out of 154 countries ranked in the 2021 Chainalysis Global Crypto Adoption Index and is not even listed in 2020, due to negligible crypto adoption figures for that year.
Vietnam topped this year’s index that aims to assess cryptocurrency adoption by “ordinary people,” while Afghanistan scored the highest of any Central Asian country.
The index found that overall cryptocurrency adoption has increased by more than 880 percent globally over the past 12 months, largely driven by emerging economies.
“Our data shows that residents of more and more countries around the world are either diving into cryptocurrencies or seeing an increase in existing adoption,” states a blog post detailing the study.
“Many emerging markets face significant currency devaluation, leading residents to buy cryptocurrencies on P2P (peer-to-peer) platforms to preserve their savings. Others in these areas use cryptocurrencies to conduct international transactions, either for individual remittances or for business use cases, such as buying goods to import and sell. “
Google Trends data shows that searches for terms such as “bitcoin” and “crypto” have risen sharply over the last year.
The recent overthrow of the government of Afghanistan by the Taliban has left many people facing financial ruin due to a combination of bank closures, cash shortages and the suspension of international money transfers from major remittance providers. like Western Union and MoneyGram.
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The United States has also frozen approximately $ 9 billion in central bank reserves, while the devaluation of the Afghan currency has caused the prices of basic goods and services to rise in the country.
Economic experts have warned of the risk of hyperinflation for the Afghan, as well as a general contraction of the economy of around 20 percent this year.
The decentralized nature of cryptocurrencies like bitcoin makes it an attractive option for Afghan citizens, who want to store their savings or move funds abroad. The fixed supply of bitcoins (there will only be 21 million bitcoins) makes it inherently anti-inflationary.
Some crypto advocates in the country have even called for a “bitcoin standard” to be introduced to guarantee Afghanistan’s sovereignty.
Janey Gak, who goes by the name Bibi Janey online, created a Facebook page in 2018 to help spread awareness of bitcoin and encourage adoption.
Following the Taliban takeover, he tweeted: “To be a truly sovereign state, the Islamic Emirate of Afghanistan must: not join the UN or allow its agencies to operate in the country; never borrow money; adopt a bitcoin standard. “