The U.S. is grappling with how to exert financial pressure on the Taliban to ensure Afghanistan doesn’t return to its role as a safe harbor for international terrorist groups, but a dearth of formal banking channels is complicating efforts.
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Bank-averse Taliban leave U.S. struggling for financial edge
“The banking system is fragile,” said Alex Zerden, who was a Treasury attache in Kabul in 2018 and 2019. He now runs Capitol Peak Strategies, a Washington financial technology and digital asset advisory firm. “The formal financial system is a very small part of the economy,” he said, adding that the hawala industry is both politically and economically important to the country, but the impact from sanctions can be limited.
