A Crypto King In Manufacturing Came As A Blessing To Ordinary Afghans -By ASC

In Afghanistan people take refuge in cryptocurrencies to maintain their wealth

The explosion of cryptocurrencies is often driven by life -changing dreams of wealth. In Afghanistan, buyers instead take digital coins in hopes of maintaining the wealth they have – and keeping it out of the Taliban’s reach.

In a white -walled office next to an open foreign exchange market, Habibullah Timori and four of his employees make trades for customers, using their Samsung phones. Chinese -made security camera surveillance. A sign on the wall reads: “Please refrain from claiming a loan.”

The place is Herat, the third largest city in Afghanistan, an oasis in the western desert about 75 miles (120 kilometers) from the Iranian border. Mr Timori said his Maihan Crypto was the largest of the country’s six crypto brokerages, four of which were located in Herat.

Many customers do not want to buy Bitcoin. Instead, they want stablecoin, a digital currency that is pegged to assets like the dollar and designed to maintain its value.

“Demand for cryptocurrencies is high,” Mr Timori, 26, said in a video interview. “During other crises, people keep their cash and jewelery in the ground or under their pillows. This time, they have decided to keep it in crypto. ”

Naser Ali, a real estate trader in the city, first visited Maihan in October, paid 150 afghani ($ 1.73) for a 45 -minute cryptocurrency training session and then registered an account with Binance, the world’s largest crypto exchange.

Mr Ali, also 26, feared the Taliban would seek to seize his assets, amid reports the extremist group stormed into a residence and took property.

In November, he took $ 30,000 from a vault at home and converted it into Tether, the largest stablecoin. Maihan helped him make the deal.

“I wish I knew about cryptocurrencies earlier, before the Taliban took over,” Mr Ali said in an interview.

This is another example of how cryptocurrencies have found new uses in the past year in countries torn apart by civil strife or war. Ukraine has received more than $ 60 million in crypto donations since Russia attacked it in late February. And in Myanmar, the government in exile has recognized Tether as its official currency as it seeks to fund a campaign to topple the military junta that seized power last year.

The Taliban takeover has many unfortunate consequences for Afghans, said Alex Zerden, a former financial attaché to Afghanistan for the U.S. Treasury Department whose firm, Capitol Peak Strategies, advises crypto companies. No wonder people are using digital assets as a way to reduce the group’s interference in their economic affairs, he said.

The Taliban seized Herat in August, and marched into the capital two days later, regaining full control of the country after two decades when U.S. and NATO troops withdrew. Scenes from the fall of Kabul shocked audiences around the world.

A few months later, the country suffered under crippling sanctions. The U.S. has blocked $ 9 billion in foreign exchange reserves, the economy is on the verge of collapse, and the banking system is on the verge of collapse, with people only allowed to withdraw $ 400 a week. About 95 percent of the population does not have enough food to eat, the United Nations said in March.

The extremist group recently suspended secondary education for teenage girls, imposed gender segregation at amusement parks and ordered government employees to grow beards.

But for Mr Timori, the return of the Taliban is actually good for business – at least so far.

Maihan now handles about $ 400,000 in crypto transactions each week, Mr Timori said, more than double the level before the Taliban took over.

Last year’s report by blockchain research firm Chainalysis ranked Afghanistan as one of the top 20 countries in the world in terms of crypto acceptance. The result is weighed against per capita purchasing power parity, which is in favor of poorer countries.

Buying cryptocurrencies is not easy in Afghanistan, in part because it is impossible to transfer funds directly from Afghan bank accounts to exchanges like Binance. Due to restrictions, banking relations with other countries were also severed.

That’s where brokers like Maihan come in.

Mr. Timori and his staff use the traditional Hawala system, an informal way to transfer funds that account for about 90 percent of financial transactions in Afghanistan. They send money – especially U.S. dollars – to contacts in countries like Iran, Turkey and the U.S. The person, in return, transfers digital tokens like Bitcoin and stablecoin to Binance Maihan’s wallet.

This means customers can bring money to Maihan and get Tether, Bitcoin or other digital currencies in return. Brokers also keep a supply of funds when clients want to exchange their crypto for cash.

Of course, stablecoin is not necessarily risk -free. Tether, which has a market cap of about $ 83 billion, has long been plagued by speculation as to whether it is backed one-for-one by assets as alleged.

Maihan charges a commission of 1.5 percent on each crypto transaction, several times greater than the percentage typically charged by exchanges like Binance. It takes in incomes from $ 16,000 to $ 20,000 a month, according to Timori.

Timori said he was able to save about $ 6,000 of that amount, a significant amount in a country where the average government employee earns about $ 400 a month, according to the Finance Ministry.

That doesn’t mean he has a fancy lifestyle. Mr Timori is the sole breadwinner in a family of 11 people, including his parents and siblings. But he has been able to help his father pay off a $ 60,000 debt, a legacy of the collapse of his construction business in 2016.

Mr. Timori first ventured into the field of crypto in 2016 when he read about the “Bitcoin Pizza” guy, who bought two large pizzas for 10,000 Bitcoins in 2010, worth about $ 40. If he kept the coins, they would be worth about $ 400 million today.

He was studying town planning at Herat University at the time. After graduating, he decided to open a crypto brokerage.

Mr. Timori started the business from his home in Herat in 2017, using social media for marketing. He offers “crypto sales and purchases in a matter of seconds.” Maihan grew rapidly, moving to a white -walled office at the end of the year.

Herat became the center of crypto for several reasons. One of them is close to Iran, where its business is more extensive. Another was that someone else in the open foreign exchange market near Mr Timori’s office followed him into the game.

Mr Timori said he felt safer since the Taliban returned. Last year, when kidnappings and robberies in Herat increased, he kept a gun in his office for protection.

But as the Taliban cracked down on kidnappings in the city, Mr Timori said he felt more comfortable about his safety, and handed over his weapons to the regime.

Still, while the group’s return may have boosted Mr Timori’s business, it could also be his biggest threat.

The question now is how theocracy, which has one of the strictest interpretations of Islam in the world, will determine the future of cryptocurrencies.

Under pressure from comprehensive sanctions, the group said it is looking at all options to revive the economy, including, potentially, accepting crypto.

But economists and religious scholars must study whether digital tokens can be allowed under Islamic financial practices, Suhail Shaheen, head of the Taliban’s political office in Doha, Qatar, said in an interview with Bloomberg in February.

The Taliban hardline will eventually win, according to Ehsan Sadiq, a former economics lecturer at Jawzjan University in northern Afghanistan. Traditionalists at the Ministry of Welfare Dissemination and Prevention of Vice define it as gambling, “which is strictly forbidden in Islam,” he said.

There is already a precedent in the Islamic world. In November, Indonesia’s council of religious leaders declared that the cryptocurrency was banned for Muslims because it had elements of uncertainty, betting and danger.

“The Taliban will definitely ban it,” said Mr Sadiq, who left the country after the extremist group returned to power and is now in Germany.

The regime has curbed some crypto miners, according to Mr Timori, but not because they mine Bitcoin. He told the story of one of his friends. The Taliban set fire to 50 of its computers for mining, believing it was used by the Americans to spy on the country. His friend fled to Iran, he said.

And that, Mr Timori said, is what he would do if the Taliban banned crypto. He would also pack everything up and make the trip of about two hours to the border. Once in Iran, he will resume his business.

“We should not be seen as dangerous to the Taliban,” Mr Timori said. “We are helping to save the country’s economy from collapse,” he said. “The Taliban must understand that.”

(Except for the headline, this story has not been edited by AGRASMARTCITY staff and is published from a syndicated feed.)


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