How cryptocurrencies thrive in crisis zones – Newspaper

BANGKOK / LOS ANGELES: When the Taliban took power in August, the Aseel online marketplace quickly went from selling handicrafts to accepting cryptocurrency donations to buy emergency aid for Afghans.

The e-commerce platform is one of several charities using cryptocurrencies to support those who cannot access traditional banking systems and who continue to rely on digital currencies.

“We cannot pay in cash due to the sanctions,” said Mohammad Nasir, Aseel’s technical manager.

Aseel accepts donations in cryptocurrencies and official currencies, which it converts into digital currencies to purchase supplies such as food and first aid.

As the cryptocurrency markets fall, bitcoin has lost around 60% of its value this year and even smaller coins have been hit hard, leaving many investors struggling with losses.

It reflected a decline in stock prices, linked to investor concerns about rising interest rates and the growing likelihood of a global recession. But crypto retains its appeal in places where sanctions and other disruptions hinder traditional financial systems, even as more countries are cracking down.

Cryptocurrencies were designed to be free from central financial authorities such as governments and central banks. They allow “peer-to-peer” transfers between online users without intermediaries.

Their relative anonymity offers a refuge for criminals, extremist groups and sanctioned governments, but supporters say they also support citizens caught up in crises.

When Russia invaded Ukraine, activist Lyudmyla Kozlovska relied on bitcoin to buy supplies for people trapped in war zones.

“The banking system didn’t work in the early days of the invasion,” said Kozlovska, a Ukrainian based in Brussels and founder of the human rights organization Open Dialogue Foundation. Ukraine has raised around $ 100 million in cryptocurrencies since the conflict began in February, although the government’s fund has been depleted since the collapse.

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Cryptocurrencies also thrive in Gaza, where Palestinians are blocked by popular international payment apps and often have to pay high fees to local banks and intermediaries to send and receive payments from abroad, said Ibrahim Elhout, a software developer in Gaza.

“It is really difficult to get payments in Gaza. We have restrictions … from most of the world, “said Elhout, whose overseas customers sometimes pay for him in cryptocurrencies.

Published in Dawn, June 24, 2022

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