War-Affected Afghanistan Plans to Use Bitcoin; To Rebuild its Economy

Afghanistan is trying to rise back with dignity after a three-decade economic turmoil. The country is now looking towards cryptocurrency to develop its economy mainly focusing on Bitcoin. The country has been left to dust. The objective of Afghanistan is to use bitcoin as a new form of currency to reshape the country and improve its economy.

Post-warn-torn, the country is called as ‘Graveyard of Great Empires’ and is working hard to maintain its economy.

At the Spring Meeting summit, Afghanistan’s Central bank governor Khalil Sediq mentioned that sovereign bonds will be issued to raise a fund of worth $5.8 billion, the raised fund will be used to develop infrastructure projects. Further, he said that the country will attempt to associate Bitcoin with the Lithium market of worth $3 million. The digitally signed government bonds will be distributed to investors through blockchain.

Political turmoil in Afghanistan began in the 1970s, the time when the president Daud Khan was assassinated. This paved the way for the Soviet Union and the United States to enter Afghanistan. This led to conflict between the two superpowers.

A decade later in the 1980s, the Soviet Union decided to leave Afghanistan and this made the Taliban rule the country. Nevertheless, the United States again invaded Afghanistan after the shocking incidence of 9/11 which disturbed the whole world. The only objective of US invading Afghanistan back was to destroy the Taliban’s regime which led for a prolonged war, and many witnessed it too.

All the disturbing events in Afghanistan be it political or power struggle, these events have greatly damaged the country’s economy. In 1980s Afghanistan’s GDP dropped dramatically. The war made lots of people to migrate to different places.

A source reported that external debts of Afghanistan have reached to the highest level with massive risks.

International Monetary Fund stated: “Even a gradual replacement of donor grants with loan financing (a customized illustrative scenario) would quickly lead to an unsustainable debt burden.”

Bitcoin to help sustain Afghanistan economy – three-decade turmoil

Afghanistan economic trouble started in the 1970s and lasted for nearly another two decades. When the US had invaded the country back in the 1980s, US defeated Soviet Union in 1989 and surrendered Afghanistan to their then allies –the Taliban. However, the Wahabbi Islamist group worked hard and did all it could do to bring the nation to the stone age.

The Taliban master-planned the 9/11 attack on the US, this led US to re-invade again and resulted in a war. Such events led the nation to lose important opportunities that could have improved their economy. Huge loss of labor, capital, transport, trade and infrastructure was noticed. The 3 decade turmoil has significantly impacted the nation and its economy, nearly 25 percent of Afghans are unemployed and lives below the poverty line.

Numerous restrictions have been imposed by the World Bank on Afghanistan’s non concessionary borrowing- loans provided with a regular interest rate. This World Bank move made the nation difficult to carry its mining and agricultural projects.

Bitcoin the only hope

Sediq believes that Bitcoin the digital currency might help the country to access international markets. There is a huge demand for Lithium in the global market due to companies like Tesla and others. Bitcoin might enable global investors to figure out the potential of mineral reserves of Afghanistan.

The Managing director of IMF backs the move of Afghanistan and says that bond issuance over blockchain should undergo a sandbox testing.

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