Pakistan’s Crypto Future: Is The Wind Changing?

Cryptocurrency is making waves again. Since the fall of SVB, there has been a subsequent resurgence of crypto tokens including Bitcoin – which has recently risen by as much as 18% – as well as altcoins like Loopring – which has recently seen an impressive incline of 1.54%. This is because, quite simply, the preconception around fiat banks and their rigidity has been weakened. 

Looking at the Loopring Price in particular,  it is clear that this weakening has caused more and more people to investigate cryptocurrency more closely, allowing the market – even down to relatively unknown altcoins – to gain traction. People and governments are beginning to realise the opportunities that blockchain can present in place of traditionalism. 

The Relationship Between Pakistan And Cryptocurrency

Pakistan, especially, is a country that has had a relatively shaky history when it comes to blockchain. In early 2021, Pakistan’s central bank submitted documents to an ongoing court case, stating cryptocurrency was causing an outflow of foreign exchange from the country. 

For this reason, they called for cryptocurrency to be entirely banned, citing currency devaluation, high inflation and account deficits as the main reasons that the “risks outweigh the rewards”. The PTA (Pakistan Telecommunications Authority) opposed this, however. According to them, banning crypto would affect a number of associated technologies, causing a hampering of progress and the complete eradication of many IT start-ups. 

Since then, the relationship between Pakistan and cryptocurrency has been disconnected. At some points, it seems that the government is intent on finding a way to incorporate it – the law ministry suggested coming up with a competent, legal framework – at other times, it seems to be completely ignored. But the recent resurgence in popularity might be turning the wind in crypto’s favour.

Pakistan’s Relationship With Crypto In 2023

At times, it looks as if the disconnect in the government’s crypto stance has had an adverse effect on the people of Pakistan itself. With not a lot of evident buzz for the digital coin, it would be acceptable to think that Pakistan is either not ready for a digital revolution, or is simply content in maintaining traditional finance options. But recent data estimated that as much as 4.1% of Pakistanis – which amounts to nearly nine million people – owned cryptocurrency in some shape or form. This ownership, according to the PAB and FPCCI, results in a cumulative ownership of $20 billion, which is $9.8 billion more than the reserves held by the SBP. 

Pakistan, then, is not only acutely aware of the digital revolution, but it is a big part of it. This, in its own way, is causing a unique, yet ultimately positive financial impact in the country. It could also be the reason why there has not yet been a seismic move by the government – apart from the standard regulations that a number of other countries have also put in place. The regulations in question, however, do not translate to the halting of crypto activity. In fact, many crypto exchanges continue to operate in Pakistan, using ghost partners to bypass the regulatory framework. 

With the financial benefits in mind, it is likely that the government might actually do more to accept blockchain technology, rather than oppose it. Overlooking blockchain as a vital next step in the lead up to Web3 only leads to more complication when it comes to regulating it. Instead, acceptance of blockchain technology as it grows could be essential for Pakistan to build a financial muscle, which can be used to tackle the loopholes that users are getting around. 

The Future Of Pakistan And Cryptocurrency

The future of Pakistan and cryptocurrency, like its past, is quite unpredictable. As mentioned before, Pakistan has quietly been booming when it comes to crypto trading – especially in the last few years, with the country ranking 3rd behind Vietnam and India in the Global Crypto Adoption Index of 2020-21. But more needs to be done if the full benefits of cryptocurrency are to be felt. In other words, the central bank needs to see that those benefits do outweigh the risks. But the wind is certainly changing. 

It also helps that the circumstances surrounding cryptocurrency are relatively positive at the moment. Although the landscape is still in its second crypto winter, small gains are being made across the board, with a number of altcoins – such as Loophole or PancakeSwap – rising in popularity due to the ongoing disassociation with traditional fiat banking. This is important because, despite popular tokens like Bitcoin being the most talked about, it is the altcoins that might be crucial in ensuring an efficient, global crypto landscape. Simply due to the benefits that they offer, as well as the “in” for everyday users.

Networks like Ethereum are also helping proceedings, with its recent merge into Ethereum 2.0 demonstrating a new path toward sustainability, efficiency and practicality which could be revolutionary for the market. When it comes to Pakistan, then, it might only be a matter of time before true adoption becomes a real possibility. As mentioned before, blockchain is going to play a big role in all of our lives by around 2030 – especially with the introduction of Web3 – and if interest in crypto continues to grow, Pakistan might be playing a big role too. 

 

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