How crypto thrives in crisis zones – World

BANGKOK/LOS ANGELES: When the Taliban seized power in August, the online marketplace Aseel quickly pivoted from selling handmade crafts to accepting donations of cryptocurrency to buy emergency aid for Afghans.

The e-commerce platform is one of a growing number of charities using crypto to support those who cannot access traditional banking systems and who continue to rely on the digital coins.

“We cannot give cash payments because of the sanctions,” said Aseel’s technical lead Mohammad Nasir.

Aseel takes donations in crypto, as well as official currencies, which it converts into digital coins to buy supplies such as food and first aid.

The fall in crypto markets, bitcoin has lost about 60 per cent of its value this year and smaller coins have also been hit hard, has left many investors nursing losses.

It has mirrored a slide in equities 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 hamper traditional financial systems, even though more countries are clamping down.

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

Their relative anonymity offers a haven for criminals, extremist groups and sanctioned governments — but champions 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 warzones.

“The bank system didn’t work in the early days of the invasion,” said Kozlovska, a Ukrainian based in Brussels and founder of human rights organisation Open Dialogue Foun­dation. Ukraine has raised about $100 million in crypto since the start of the conflict in February, although the government’s fund has been depleted by the crash.

Crypto is also thriving in Gaza, where Palestinians are locked out of popular international payment apps, and often have to pay high fees to local banks and middlemen to send and receive payments from abroad, said Ibrahim Elhout, a software developer in Gaza.

“It’s really difficult to get payments in Gaza. We have restrictions … from most of the world,” said Elhout, whose overseas clients sometimes pay him in crypto.

Published in Dawn, June 24th, 2022

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