With the Taliban solidifying their control over Afghanistan over the past couple of weeks, the country has plunged into a financial crisis, with a cash shortage, a currency in freefall, and rising prices of consumer goods. Some Afghans are reportedly looking to crypto as a source of financial stability.

Why should we care?
The economic instability in Afghanistan is a useful test case for crypto’s utility in situations where the traditional financial system is in near collapse. As banks closed their doors due to cash shortages, many Afghans were left without access to their assets. Against that backdrop, some Afghans turned to crypto to fill the gaps, according to a recent report. “If a government isn’t formed quickly, we might see a Venezuela-type situation here,” one Afghan crypto investor said, noting that virtual tokens are a hedge against political and economic uncertainty. Google trends searches for “bitcoin” and “crypto” rose sharply this summer in the leadup to the Taliban takeover of Kabul. Others in the crypto ecosystem pounced on the Afghanistan example as a reason why crypto adoption should be more widespread. As some Afghans dabble in crypto to protect their assets, some crypto diehards from other parts of the world began to wonder whether crypto could have fixed the country’s problems or prevented the need for war in the first place. Others aren’t as easily convinced. “We shouldn’t pretend that Bitcoin will fix the immediate suffering there, but it absolutely helps solve the problem of empire, by starving the empire of tax revenues and curtailing its ability to print currency for the funding of wars,” Erik Voorhees, Bitcoin advocate and CEO of self-custody crypto platform ShapeShift, said in an interview.