The crypto industry in Pakistan has been under scrutiny ever since the State Bank called for a ban on cryptocurrency. The State Bank of Pakistan has the narrative that there is a high risk involving online trading of such coins that outweigh the potential benefit. The State Bank further plans to stricken laws against cryptocurrencies to prevent electronic crimes and money laundering.
However, Waqar Zaka and other cryptocurrency flag barriers believe this act could backfire for Pakistan. Federation of Pakistan Chamber of Commerce & Industry (FPCCI) estimates total cryptocurrency investments in Pakistan at US$20 billion or more than the country’s total foreign currency reserves now held by the central bank.
Many Pakistanis think crypto is the solution to their financial woes. The country is facing high inflation, heavy debts, and low foreign reserves. Industry experts have also given this decision thumbs down as they believe that banning crypto is no solution and Pakistan is likely to make a big mistake.
Although crypto is a global phenomenon and action taken by any particular country may not be able to stop such a revolution, it could result in brain drain as freelancers and developers will move out of the state to fetch roles in the growing space.
Pakistan has one of the highest rates of crypto adoption in the world, and while exact numbers of how many citizens have invested in crypto assets are not available, it is safe to argue that there are more individual crypto investors than stock market investors in the country. People see growth in crypto investment to be much higher and likely other than stock investment. More and more people, despite laws enforced by State Bank, are investing in blockchain and crypto.
The world is undergoing a diverse technological shift in its paradigm. Times are changing and so is the need for diversification. Around the world, ranging from India to Singapore and the United States are pursuing regulations that balance between risk mitigation and innovation. However, Pakistan is still stuck in a dilemma.
The regulators should realize that technology will move faster than their minds can grasp and the way to handle it is not to try to stop advancements in technology but maybe be open to new developments. It’s high time authorities realize the pros of legalizing cryptocurrency in Pakistan.