Self-custodial wallet / non-custodial software in Afghanistan

The current de facto Taliban administration's official stance, as widely reported since August 2022, is a ban on cryptocurrency trading, deeming it "haram" (forbidden in Islam) and a source of fraud. This outright ban supersedes any potential regulatory framework for VASPs.

Any entity attempting to operate as a VASP would be doing so outside of the law as enforced by the current de facto authorities.

Violation Type: Engaging in unauthorized and prohibited financial activity (trading cryptocurrency). The Taliban's acting central bank chief has called crypto "haram" (forbidden in Islam) and a form of "gambling.". Penalty Amount: No specific fine amount is publicly reported for this blanket ban. Penalties involve arrests, detention, closure of businesses, and confiscation of assets.

Outcome: Arrests of key individuals, closure of an estimated 16 cryptocurrency exchanges in Herat alone, effectively dismantling the local crypto market.

Continuing Risk: The ban remains in effect, and anyone found engaging in crypto trading faces the risk of arrest and other punitive measures by the Taliban authorities.

Regulatory Framework: Afghanistan lacks a modern, institutionalized cryptocurrency regulatory framework. The "enforcement" stems from a religious decree and a ban enforced by police powers, rather than a financial regulatory body issuing fines under established laws.

Transparency: Under the Taliban regime, there is a severe lack of transparency regarding legal processes, court decisions, specific charges, and exact penalties. Information is primarily derived from official statements or reports from international news agencies.

Custodial License Requirements: There are no specific custodial license requirements for digital asset custody in Afghanistan. The operation of any crypto-related business, let alone a custody provider, would be highly precarious and likely illegal under the current regime's informal decrees.

These laws, while on the books from the previous government, do not specifically address virtual assets or VASPs. They were drafted before cryptocurrencies became a significant regulatory concern globally.

Da Afghanistan Bank (DAB): Currently controlled by the de facto Taliban administration. It is the institution that has reportedly enforced the ban on cryptocurrency trading. Therefore, its role concerning VASPs is one of prohibition and enforcement of the ban, rather than regulation and oversight.

FinTRACA: Its operational capacity and international recognition are highly questionable under the current regime.

As of April 2026, Pakistan has partially lifted its ban on crypto by allowing licensed VASPs to open bank accounts, and while the new framework does not explicitly amend FinTRACA's reporting guidelines, licensed VASPs are expected to file STRs under FATF guidance, making the claim that no formal mechanism or expectation exists inaccurate for licensed entities.