The US on Wednesday announced that it would transfer $3.5 billion in Afghan central bank assets into a new Swiss-based trust fund that will be shielded from the Islamic Emirate and used to help stabilize Afghanistan's collapsed economy.  

The Afghan Fund, managed by a board of trustees, could pay for critical imports like electricity, cover debt payments to international financial institutions, protecting Afghanistan's eligibility for development aid, and fund the printing of new currency.  

"The Afghan Fund will protect, preserve and make targeted disbursements of that $3.5 billion to help provide greater stability to the Afghan economy," the US Treasury said in a statement.  

The US officials said no money would go to the Afghan central bank, known as DAB, until it is "free of political interference" - diplomatic parlance for replacing the bank's top Islamic Emirate officials, two of whom are under US and UN sanctions, with banking professionals - and anti-money laundering safeguards are instituted.  

"Until these conditions are met, sending assets to DAB would place them at unacceptable risk and jeopardize them as a source of support for the Afghan people," US Deputy Treasury Secretary Wally Ademeyo said in a letter to the central bank's Supreme Council seen by Reuters.  

The new foundation is based in Geneva and has an account with the Basel-based Bank for International Settlements (BIS), which provides financial services to central banks.  

"The BIS is establishing a customer relationship with the Fund for the Afghan People. The BIS role is limited to providing banking services to and executing the instructions of the Board of Trustees of the Fund without involvement in the Fund's governance or decision making," the BIS said, adding it would comply with all applicable sanctions and regulations.  

Meanwhile, the Ministry of Economy said that the Afghan assets should be handed over to the Islamic Emirate for use on infrastructural projects.  

“The released funds should be given to the government of Afghanistan to use for infrastructure, the development sector and also to back the Afghan currency,” said Abdul Latif Nazari, Deputy Minister of Economy.  

The economists said that the use of the Afghan assets for humanitarian purposes will have a negative impact on the Afghan economy.  

“The transfer of $3.5 billion of Afghan assets to one of the banks could be compared more likely to a political and economic tactic by the US to avoid international pressure and criticisms,” said Shakir Yaqob, an economist. 

“These assets in foreign reserves are used to maintain the stability of the currency ... as well as to back investment,” said Seyar Qureshi, an economist.  

The Swiss government said it would support the foundation that it helped Washington set up by contributing finance and development expertise. It named foreign ministry official Alexandra Baumann as its board representative.