KABUL (BLOOMBERG) - Afghanistan's central bank imposed a nationwide ban on cryptocurrencies this month and the Taliban regime has arrested several dealers who defied orders to stop trading digital tokens, according to a senior police official.
The crackdown comes after some Afghans turned to cryptocurrencies to preserve their wealth and keep it out of the Taliban's reach.
Crypto has become a popular way of moving money in and out of the country, which is shut off from the global banking system due to sanctions levelled on the militant group.
"The central bank gave us an order to stop all money changers, individuals, and businesspeople from trading fraudulent digital currencies like what is commonly referred to as Bitcoin," Mr Sayed Shah Saadaat, head of criminal investigations at the police headquarters in Herat, said by phone.
Mr Saadaat said 13 people were arrested, most of whom were released on bail, while more than 20 cryoto-related businesses have been shut down in Herat, Afghanistan's third-largest city and a hub for trading in digital tokens.
Four of the six crypto brokerages in Afghanistan are located in the city, about 121km away from the Iranian border.
The Taliban in February said they would study whether digital tokens can be allowed under Islamic financial practices, as they were looking at all options to revive the battered economy.