FEATURE-Wages to Remittances: Afghans Embrace Crypto Amid Financial Chaos

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* Afghans look to cryptocurrency as currency tumble * Crypto is especially beneficial for women and those without bank accounts

* Growing acceptance in failed or weakly governed countries By Rina Chandran

October 11 (Thomson Reuters Foundation) – When Roya Mahboob started paying her staff and freelancers in Afghanistan in bitcoin almost 10 years ago, she had no idea that for some of these women, digital currency would be their ticket. leaving the country after the fall of Kabul in August. Mahboob, founder of the nonprofit Digital Citizen Fund with her sister, has taught thousands of girls and women basic computer skills at their centers in Herat and Kabul. The women also wrote blogs and made videos for which they were paid in cash.

Most girls and women did not have a bank account because they were not allowed to do so or because they did not have the necessary documents. So Mahboob used the informal hawala brokerage system to send money – until she discovered bitcoin. “It wasn’t possible – or safe – to send money to everyone, but mobile money wasn’t used as widely and options like PayPal didn’t exist. Then we heard. talk about bitcoin, ”Mahboob, 34, told the Thomson Reuters Foundation.

“It was easy to use, cheaper and safer than the other options. So we taught the girls how to use it and started paying our staff and contributors with it – we told them it was an investment. for the future, ”she said. About a third of the nearly 16,000 girls and women who learned basic computer skills at Mahboob’s centers also learned how to set up a crypto wallet and receive funds – and, if they so choose, how to trade and invest in it. bitcoin and ethereum, another big cryptocurrency.

Several of these women left the country after the Taliban captured Kabul on August 15, and some used their crypto wallets to move their money, help evacuate their families and settle in new countries, Mahboob said. The adoption of cryptocurrencies is growing rapidly across the world, with El Salvador last month becoming the first country to adopt bitcoin as legal tender, despite fears of excluding the poor from the nations.

Even though large institutional investors have pushed bitcoin to all-time highs this year, it is also increasingly adopted by those without access to the formal banking system, those in conflict zones, or those in financial crisis. countries with weak governance, according to technology and financial experts. “In failed or contested states, it allows people to support their family members,” said Keith Carter, associate professor at the School of Computing at the National University of Singapore, citing Venezuela where people have bought essential goods with dogecoins after the national currency went into effect. free fall.

“Cryptocurrency, where appropriate, goes where there is a lack of digital infrastructure and encourages infrastructure development by increasing demand for digital services,” he said. ‘GOOD OPTION’

Cryptocurrencies are moving from the margins of finance to the mainstream, with major investors, businesses and even countries poised to embrace them as a routine asset and payment medium. But it is in countries like Afghanistan, where a majority do not have bank accounts, where banks are closed for long periods of time and where the currency has plunged, that its most ardent fans emerge.

Like Farhan Hotak, 22, who helped his family flee the southern province of Zabul to Pakistan, then returned to monitor his home and post vlogs on Instagram about developments to his more than 20,000 followers. Hotak got into cryptocurrency around 2019, he said, when he started hearing about the huge profits to be made with bitcoin. With last year’s lockdowns to contain the coronavirus pandemic, he was online most of the time and started investing.

He first made quick profits, then started following crypto users elsewhere and investing in new coins like Matic, XRP, and xHunter. “This is a good option for me, and for others like me,” said Hotak, who posted vlogs to his crypto Instagram account and also interested his friends.

“I would like to set up a crypto course for Afghans – help them understand it better so that it can help them. In the meantime, I will be talking about crypto in every province I visit,” he added. . While cryptocurrency advocates point out the benefits, including such as a hedge against political uncertainty, hyperinflation, and a way to send remittances without commissions or brokers, governments remain cautious and China has banned any crypto related activity last month.

Researchers from the Sydney University of Technology found that nearly half of all bitcoin transactions from 2009 to 2017 were related to buying and selling illegal goods and services, with around one in three users involved. in such activity. While a report by research firm Chainalysis showed that the criminal share of all cryptocurrency activity fell to 0.34% of total transaction volume last year, from 2.1% in 2019.

For Mahboob and his alumni, as well as the growing user base of mostly young men in Afghanistan, cryptocurrency has provided a lifeline, despite the challenges. “I’m thinking now – why haven’t we taught crypto more aggressively, so that more Afghans can have crypto wallets and be able to access their money now,” said Mahboob, who was named among the Time magazine’s 100 most influential people in 2013.

“Traffickers and kidnappers will always find a way to abuse a system. But the power of crypto is greater – especially for women and those who do not have a bank account, it is very beneficial and therefore empowering, ”she said.

(This story was not edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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