In the heart of a market in western Afghanistan, Arezo Akrimi, a 19-year-old student, takes out her phone. With a few taps on the screen, she converts a small amount of cryptocurrency into a bundle of cash. This simple act is part of a growing trend that is providing crucial support to many Afghans facing extreme economic hardship.
Arezo is one of hundreds of students in Herat who have been receiving around $200 per month in cryptocurrency since September, thanks to a U.S.-based educational initiative. For her, this financial aid is essential—it helps pay rent and feed her family of six.
Since the Taliban’s return to power in August, Afghanistan’s economy has faced severe challenges. Billions of dollars in foreign assets have been frozen, and international aid has significantly decreased. Amid these difficulties, cryptocurrency—with its decentralized nature—has emerged as a vital tool for some Afghans to bypass economic sanctions and access much-needed funds.
The Role of Cryptocurrency in Afghanistan’s Economy
Cryptocurrency operates on a decentralized network, making it resistant to international sanctions and traditional banking restrictions. This feature has allowed it to serve as a financial lifeline in countries experiencing political or economic instability, including Afghanistan.
For many, converting digital assets into local currency offers a faster, cheaper, and more reliable alternative to conventional banking or informal transfer systems. This is especially valuable in a context where official banking channels are largely dysfunctional.
Overcoming Banking Barriers
Before the Taliban takeover, Afghanistan’s financial system was already fragile. Now, with most foreign aid suspended and assets frozen, accessing cash has become extremely difficult. Individuals face a weekly withdrawal limit of around $200, while businesses can withdraw only up to $2,000. Long queues and banking delays are common.
Cryptocurrency transactions help circumvent these obstacles. Organizations like Code to Inspire, which initially focused on teaching programming to women in Herat, now use crypto to distribute funds directly to students. This ensures that financial support reaches those in need without intermediaries.
Fereshteh Forough, the founder of Code to Inspire, explains: “Cryptocurrency is an incredible tool to overcome political and economic sanctions. It can truly transform lives in authoritarian regimes.”
Stablecoins: A Safe Haven in Volatile Times
To protect recipients from the extreme price volatility associated with cryptocurrencies like Bitcoin, many aid organizations use stablecoins. These digital assets are pegged to stable currencies like the U.S. dollar, ensuring their value remains consistent.
For example, the aid distributed in Herat is provided in BUSD, a stablecoin that mirrors the value of the dollar. This approach minimizes risk for recipients who depend on these funds for daily expenses.
How Afghans Are Using Cryptocurrency
From receiving remittances to running businesses, cryptocurrencies are being adopted in various ways across Afghanistan.
Receiving International Support
Cryptocurrency has become a popular method for receiving financial support from abroad. Hamidullah Temori, a currency exchange trader in Herat, has observed an 80% increase in crypto-based remittances since the Taliban came to power.
Transactions are instant, and fees are much lower than those charged by traditional systems like Hawala or Western Union. This efficiency makes crypto particularly appealing for families relying on financial help from overseas relatives.
Supporting Entrepreneurship and Trade
Some Afghan entrepreneurs are also turning to cryptocurrency to sustain their businesses. Nur Ahmad Haydar, a saffron exporter based in Kabul, now receives about 90% of his payments in Bitcoin. This allows him to avoid the complexities and delays associated with international bank transfers.
He says, “Since August, cryptocurrency has become the only viable option for me—it’s fast and convenient.”
Investment and Income Generation
A growing number of young Afghans are exploring cryptocurrency as a source of income or investment. Ruholamin Haqshanas, a 22-year-old student and writer, earns his salary in stablecoins. This shields his earnings from the rapid depreciation of the Afghan afghani and soaring inflation.
He notes, “Stablecoins are an effective hedge against currency devaluation.” In fact, he now earns more than his father, a doctor.
Others, like Parisa Rahamati, engage in higher-risk crypto trading. By investing in volatile assets like Ethereum, she managed to earn $600 in February—a significant sum that supports her and her widowed, unemployed mother.
However, she cautions, “You have to be willing to take risks. Cryptocurrency is 50/50—you can double your money or lose it all.”
Challenges and Limitations
Despite its benefits, cryptocurrency adoption in Afghanistan faces significant hurdles.
Limited Internet Access and Digital Literacy
Widespread adoption of digital currencies requires reliable internet access and a basic understanding of technology—both of which are lacking in many parts of Afghanistan. Without improvements in infrastructure and education, crypto’s potential will remain limited to a small segment of the population.
Regulatory and Security Concerns
The absence of clear regulations poses risks for users. Fraud and market manipulation are ongoing concerns, especially for those new to digital assets. Additionally, the Taliban’s stance on cryptocurrency remains uncertain, which could impact its future use.
Frequently Asked Questions
How are Afghans accessing cryptocurrency?
Most users rely on smartphones and mobile internet to access crypto wallets and exchanges. Peer-to-peer platforms and local brokers also facilitate transactions.
Is cryptocurrency legal in Afghanistan?
There is no official legislation banning cryptocurrency, but the regulatory environment is unclear. Users should exercise caution and stay informed about local policies.
What are the risks of using cryptocurrency in Afghanistan?
Volatility, cybersecurity threats, and limited recourse in case of fraud are key risks. Using stablecoins can reduce exposure to price fluctuations.
Can cryptocurrency replace traditional aid?
While crypto offers a efficient way to distribute funds, it is not a standalone solution. It works best as part of a broader strategy that includes infrastructure development and education.
How can someone outside Afghanistan send crypto to people there?
Donors can transfer stablecoins or other cryptocurrencies to digital wallets provided by recipients. Local exchange services can then convert these into cash.
Are women allowed to use cryptocurrency in Afghanistan?
Yes, though social and economic barriers may limit access. Initiatives like Code to Inspire actively encourage women’s participation in the digital economy.
The Future of Cryptocurrency in Afghanistan
Cryptocurrency has already provided critical support to many Afghans during a time of economic crisis. Its ability to bypass traditional financial barriers makes it a powerful tool for humanitarian aid and personal finance.
However, long-term success will depend on improving digital literacy, expanding internet access, and establishing clear regulations. For those looking to explore practical strategies for using digital assets in challenging environments, education and cautious experimentation are key.
As Fereshteh Forough observes, cryptocurrency is more than just a workaround—it’s a lifeline that can empower individuals and communities even in the most difficult circumstances.