Crypto remittances are a lifeline for the world’s most vulnerable – TechCrunch

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Cryptocurrency remittances are the lifeblood of Afghans after the sudden withdrawal of the United States caused the Western Union to temporarily suspend operations and domestic banks severely restricted the withdrawal.

Regulators in sending countries, such as the United States and the United Kingdom, are looking at cryptocurrencies, so it’s important to remember how essential these currencies are for the most vulnerable people in the world.

Cryptography is becoming increasingly essential as not only is it difficult to access local currencies in Afghanistan and elsewhere, but it also becomes less reliable as a storage place for value. Conflicts foster inflation and devalue currencies — sometimes they are worthless.

If you regulate cryptocurrency transfers to appease cryptocurrency hawks at home, you run the risk of turning your back (again) to those who need this asset class most, the Afghan people and many others.

They need to be fast in order for remittances to remain a lifeline. When money is needed, it is often needed immediately.

With the Taliban hijacking, Afghanistan’s financial system will also freeze. Foreign aid has stopped. 40% of Afghanistan’s GDP, According to the World Bank. Similarly The Central Bank of Afghanistan has been frozen, which is about $ 9 billion.

In addition, in response to the Taliban acquisition and the suspension of foreign aid by Western countries, international remittance companies such as Western Union and MoneyGram have ceased services (and in some cases have resumed operations for now), on average. There is no way for a typical Afghan. There is no way to get involved in the global financial system and, decisively, receive remittances from overseas relatives.

Remittance, the practice of sending money “home” from a rich country, It accounts for about 4% of the country’s GDP.. In an economy that relies heavily on cash, the sudden collapse of local financial infrastructure may mean the difference between life and death for many Afghans.

They need to be fast in order for remittances to remain a lifeline. When money is needed, it is often needed immediately. Internally displaced persons, for example, cannot wait 3-5 days for their funds to be liquidated. They need food, fuel and medicines today.

Bitcoin’s “maximalist” argues openly about how cryptography will change the world’s economic system. Believe it or not, we can see that cryptocurrencies are already revolutionizing remittances in volatile and conflict-prone areas. Afghanistan presents a use case for cryptocurrency textbooks in failed states.

At times, the total need creates the strongest debate about new technologies.Afghanistan 20th on the list of 154 countries in the Global Cryptographic Adoption Index developed by Chainalysis, Blockchain data platform. Adjusted for peer-to-peer transactions (including remittances), it ranks 7th. In 2020, Afghanistan was not on the list.

It’s not just Afghanistan. Recently, the use of cryptocurrencies has skyrocketed in Lebanon, Turkey and Venezuela. Those people aren’t trying to get rich — they’re just getting money from their foreign relatives and trying to stop their wealth from disappearing during periods of high inflation.

“Many people trade with the mining industry [cryptocurrencies] It’s not about buying products, it’s about protecting yourself from hyperinflation, “said Jhonnatan Morales, a Venezuelan-based crypto consultant. Observed..

Venezuela, one of the highest inflation rates in the worldTowards 3,000%),more and more Adopted cryptocurrency May the economy wobble.

Lebanon is another example: Downloading Lebanon in Bitcoin wallet as Lira lost 80% of its value For example, BlueWallet increased by 1,781% year-on-year in 2020.

But Afghanistan may be the most urgent and tragic case of why the Global South needs cryptography. The already collapsed Afghan currency will become even weaker as the cash shortages, soaring prices and the loss of the foreign aid the Taliban previously depended on. By allowing Afghan people to receive, store and use their wealth in Bitcoin, they may be able to protect themselves from the worst effects of failed states.

And this is what we have to remember when we regulate Western cryptocurrencies. The regulation does more than just affect speculators. It will hit people who want to send money “home”. The person who receives the transfer has the most to lose.

When Federal Reserve Board Chair Jerome Powell publishes a report on the next phase of cryptocurrency regulation, I say he is the people who need cryptocurrencies most: the people of Afghanistan, and the world like them. Hope to remember millions of people.

The West may have turned their backs on the people of Afghanistan, but our law needs to keep them from being in the dark. Cryptocurrency regulations are needed to ensure that these important financial lifelines are not lost. That way, we are closing another door of hope for those who need it most.

Crypto remittances are a lifeline for the world’s most vulnerable – TechCrunch Source link Crypto remittances are a lifeline for the world’s most vulnerable – TechCrunch

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