Herat, Afghanistan: In the middle of a bazaar in western Afghanistan, Arezo Akrimi grabs her smartphone and, after a few taps on the screen, turns some cryptocurrency into a bundle of hard money.
Arezo, 19, is one of a hundred students in Herat who has been receiving about $200 a month in cryptocurrency since September thanks to an American NGO Code To Inspire.
This amount, which she converts at an exchange office in Afghans, is crucial for the rent and for feeding her family of six.
Since the return of the Taliban in August, the Afghan economy has virtually collapsed and the country is gripped by a crisis caused by the seizure of billions of dollars in assets held abroad.
But digital currencies and their decentralized architecture, impervious to international sanctions, are enabling a handful of young Afghans to avoid the worst of the crisis.
“It was very surprising to me to learn that this can be used in Afghanistan,” Arezo told AFP. “It was really helpful.”
Code To Inspire was founded to teach computer programming to women in Herat, but its hi-tech approach now also helps students make money in the economically disadvantaged nation.
Bank transfers to Afghanistan are currently almost impossible to prevent money from falling into the hands of Islamist fundamentalists.
But even those who have money in a bank struggle to get it out — individuals are limited to withdrawing the equivalent of $200 a week, and companies $2,000.
Even those transactions require customers to queue for hours.
The cryptocurrency transfer allowed the NGO to get around these hurdles and ensure that every donation reaches those who need it most, founder Fereshteh Forough told AFP.
“Crypto is an incredible way to overcome all kinds of political and economic sanctions, as well as a tool that can change the lives of people living under authoritarian regimes,” said the American, whose parents fled Afghanistan in the 1980s.
To ensure the financial security of its students, the NGO avoids paying them in bitcoins, the most well-known cryptocurrency but whose price regularly fluctuates wildly.
Instead, it favors the BUSD, a so-called “stablecoin” whose price is backed by the dollar.
“One BUSD is one dollar,” Forough says.
In addition to this humanitarian initiative, cryptocurrencies are gaining other followers in Herat, according to forex dealer Hamidullah Temori.
He has seen an influx of new customers over the past six months, many of whom come regularly to convert cryptoassets sent to Afghans by relatives from abroad.
“Since the Taliban came to power (cryptocurrency), transfers to and from abroad have increased by 80 percent,” he told AFP.
Wire transfers are instant and commissions are much lower than Western Union or hawala transactions, the over-the-counter system traditionally favored by Afghans.
In Kabul, circumstances have made Noor Ahmad Haidar a crypto convert.
The young man, who began exporting saffron to the United States, Britain, Australia and Canada in early 2021, has now paid 90 percent of his orders in bitcoins.
“I avoid the chaotic process of bank transfers,” he says.
“Since August, it has really become the only option available and the most convenient for me.”
Afghanistan’s growing popularity was noted by Chainalysis in its 2021 Global Cryptocurrency Adoption Index, which ranked the country 20th out of 154 countries for “grassroots take-up”.
“I don’t think it’s just a response to the Taliban takeover,” said Kim Grauer, the company’s research director.
“It’s also because we are in a time where there are more solutions that allow you to trade cryptocurrencies on your phone and more people understand what it is.”
While momentum is growing, trading volume remains very low, and will continue to do so because of the lack of internet access and high illiteracy rates in Afghanistan, she says.
‘Very good protection’
But for those who can venture into this world, cryptocurrencies can be a lifeline.
In addition to his studies, Ruholamine Haqshanas writes from Herat for India-based media specializing in new technologies.
Since the arrival of the Taliban, his salary, paid entirely in stablecoins, has enabled him to absorb the galloping inflation and free fall of the Afghani.
“The stablecoins offer very good protection against loss of value of the currency,” says the 22-year-old student, who now earns more than his doctor’s father.
The young man is also trying to speculate about some of the more volatile crypto currencies, thanks to the advice of a WhatsApp group with 13,000 members in Herat.
Fellow student Parisa Rahamati made $600 in February to hedge against the price of decentralized currencies like Ethereum and Avax – a windfall she shared with her widowed and unemployed mother.
“You have to be willing to take risks,” the 22-year-old confides to him.
“Crypto is 50/50… you can double your bet or go to zero.”
This post Crypto provides solution for some in crisis-stricken Afghanistan
was original published at “https://economictimes.indiatimes.com/markets/cryptocurrency/crypto-provides-fix-for-some-in-crisis-hit-afghanistan/articleshow/90334707.cms”