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Afghanistan Shutters Domestic Crypto Exchanges

Afghanistan FlagAfghanistan launched a crackdown on crypto exchanges, closing at least sixteen such exchanges in the last week.

According to Sayed Shan Sa’adat, an Afghanistani security official:

“[Afghanistan’s central bank] stated in a letter that digital currency trading has caused lots of problems and is scamming people, therefore they should be closed. We acted and arrested all the exchangers involved in the business and closed their shops.”

Is anyone surprised?

First, you’ve got a very authoritarian regime.  If cryptocurrency really was this vast underground economy, free from government interference, that would horrify them, so it’s not surprising they’re not big fans.

Second, Islamic law is very finicky about finance.  Although there are different interpretations, it’s safe to say that that Taliban is going to take the strictest.  I am not an expert on this, and it’s possible there is no overlap since the theological constraints are mostly around charging interest.  But in Islamic countries, this thinking impacts everything from derivatives contracts to options to short selling.

But the big factor probably isn’t theocrats or theology.  It’s probably exactly as officials say: new technology + unsophisticated people + money involved = scams.  According to one resident:

Digital currency is a new phenomenon which is not used in Afghanistan, therefore the process should be monitored by the government so that there will be no scamming and people can make better investments,

 

1 Comment

  1. david:

    “very authoritarian regime” , ok , i think you are “very authoritarian regime” . very typical monotheistic thinking

    August 25, 2022 @ 6:38 pm | Reply

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