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| Bitcoin acceptance is increasing in Afghanistan |
A new study shows that bitcoin adoption in Afghanistan exploded last year after the economic crisis caused by the Taliban's takeover of the country.
Afghanistan ranks 20 out of 154 countries ranked in the Chainalysis 2021 Global Crypto Adoption Index, having not been on the list in 2020 due to negligible crypto adoption numbers that year.
Vietnam tops the index this year, which aims to assess the acceptance of cryptocurrencies by ordinary people. At the same time, Afghanistan achieved the highest score among all Central Asian countries.
The index found that the overall adoption rate of global cryptocurrencies has increased by more than 880% in the past 12 months, largely due to emerging markets.
A blog post detailing the research noted: Our data shows that residents in more and more countries around the world are studying cryptocurrency extensively or are seeing an increase in current adoption rates.
Many emerging countries are facing a significant devaluation of their currencies. This incentivizes residents to buy cryptocurrencies through P2P platforms in order to preserve their savings.
Others in these regions use cryptocurrencies for international transactions. For personal transfers or commercial use cases such as buying goods for import and selling.
Google Trends data shows that searches for terms like “bitcoin” and “cryptocurrency” have increased exponentially over the past year.
Bitcoin acceptance is increasing in Afghanistan
The fall of the Afghan government left many people in financial trouble. This is due to the combined effect of bank closures and lack of liquidity. Except for the suspension of international transfers from major fund providers such as Western Union and MoneyGram.
The United States also froze nearly $9 billion in central bank reserves. The depreciation of the Afghani currency has led to an increase in the prices of basic goods and services in the country.
Economists have warned that Afghans face the risk of hyperinflation and a macroeconomic downturn of about 20% this year.
The decentralized nature of cryptocurrencies such as Bitcoin makes them an attractive option for Afghan citizens looking to hoard savings or transfer funds abroad.
Bitcoin's continued supply - only 21 million - essentially makes it anti-inflationary. Even some of the country’s crypto proponents have called for the introduction of Bitcoin standards to secure Afghanistan’s sovereignty.