Pakistan to Explore Legalization of Cryptocurrency

[Riaz Haq]

Islamabad is establishing the Pakistan Crypto Council (PCC) to look into regulating and legalizing the use of cryptocurrencies, according to media reports. Cryptocurrency refers to digital currencies that can be used to make purchases or investments using encryption algorithms. US President Donald Trump's endorsement of cryptocurrencies and creation of a "bitcoin reserve" has boosted investor's confidence in it.  

The State Bank of Pakistan, the nation's central bank, has not authorized any individuals or organizations to carry out the sale, purchase, exchange, and investment of digital currencies, coins, and tokens. But the country has not officially banned the use of cryptocurrencies either, allowing about 20 million users to engage in crypto transactions. “We are coming on number three and four globally and there are many blockchain technology opportunities in Pakistan", said Bilal Saqib, the chair of the PCC.  

Saqib told Bloomberg that regulatory sandboxes were being developed to create fast-track systems for crypto startups, enabling them to operate within a controlled and compliant environment.

There are media reports that Pakistan is working on lower electricity tariffs to attract crypto mining and blockchain-based data centers, aiming to utilize surplus power at marginal costs while fostering growth in the digital asset industry. Demand for grid electricity has been declining amid a solar power boom in the country. 

Cryptocurrencies are managed in a blockchain, which is a digital ledger that utilizes blocks of data and time stamps to create a digital transaction record.  Similar to a traditional digital spreadsheet, a blockchain contains a log of transactions. However, it uses a distributed structure in which data is stored on multiple machines, and all copies need to match before a transaction is considered valid. Blockchain in finance allows for faster and cheaper transfers and more accurate accounting records. Blockchain technology is seen as the future of fintech (financial technology). It can help streamline tens of billions of dollars worth of remittances from overseas Pakistanis.

Downplaying the fear of the abuse of cryptocurrencies for criminal activity, Saqib told the media: “Globally 0.24 percent cryptocurrency transactions are used for wrong things,” he said. “We want to use this technology for other things like real estate, agriculture and to unlock their liquidity.”

Talking about taxation, Saqib said the government intends to implement a “balanced pro-growth tax structure” to encourage foreign investment in the crypto sector. He believes cryptocurrency can significantly boost Pakistan’s fintech sector, positioning the country as a regional leader in digital finance. 

There is a lot of interest in enabling the use of crypto currencies around the world. It is not just developing nations like Pakistan. There are many countries actively developing regulations for cryptocurrencies, with some groupings like the EU implementing measures to protect users and combat criminal activities, while others, like the US, are slowly approaching regulation through existing market regulators like the SEC and CFTC. The jury is still out on the potential for success of such efforts. 

Related Links:

Haq's Musings

South Asia Investor Review

RAAST: Pakistan's Instant Payment System

2021: A Banner Year For Tech Startups in Pakistan

Pakistan Projected to Be World's 6th Largest Economy By 2075

Digital Pakistan 2022: Broadband Penetration Soars to 90% of 15+ Po...

Working Women Seeding a Silent Revolution in Pakistan

Socioeconomic Impact of New Infrastructure in Rural Pakistan

Solar Power Boom in Pakistan

Pakistan at 75

Growing Presence of Pakistani Women in Science and Technology

Riaz Haq's Youtube Channel

 

PakAlumni Social Network

[Riaz Haq]

Digital Yuan: The New Era of Cross-Border Payments in Global Trade - Proshare


https://www.proshare.co/articles/digital-yuan-the-new-era-of-cross-....

In a move to redefine international finance, the People's Bank of China (PboC) has announced that its digital RMB cross-border settlement system will be fully connected to the ten ASEAN nations and six Middle Eastern countries, implying that about 38% of global trade could bypass the US dollar dominated SWIFT network.

Unlike SWIFT, where transactions take between 3 and 5 days and involve multiple intermediaries, China’s digital currency is set to bridge and slashes processing times to merely few seconds. A pilot project between Hong Kong and Abu Dhabi saw a payment settle in just about seven seconds, with fees dropping by 98%. The system’s speed and transparency are forcing a reevaluation of dollar-dependent frameworks, particularly in emerging markets.



Beyond speed, the digital RMB’s built-in compliance tools are drawing global attention. Its blockchain architecture enforces anti-money laundering protocols automatically, reducing fraud risks while maintaining traceability. During another test case between China and Indonesia, a cross-border payment was completed in eight seconds—a fraction of the time traditional methods require. This efficiency has already attracted 23 central banks to join the bridge test, with Middle Eastern energy traders reporting a 75% drop in settlement expenses.



As the US wields SWIFT as a sanctions tool against Russia, Iran and Others, China has been delibrate in building an alternative payment and settlement system for global trade. ASEAN’s RMB-denominated trade surged to 5.8trn yuan in 2024, with Malaysia, Singapore, and others adding the currency to their foreign reserves. Thailand’s first digital RMB oil transaction is another success story of the system, signaling a quiet but steady erosion of dollar dominance.



China’s strategy extends beyond payments. The digital RMB is woven into infrastructure projects like the China-Laos Railway and Jakarta-Bandung High-Speed Rail, forming a "Digital Silk Road" that pairs currency flows with trade corridors. European firms using the system for Arctic shipping settlements have seen efficiency gains of 400%. This fusion of physical and digital networks presents a holistic challenge to Western financial hegemony—one that transcends mere currency rivalry.



With 87% of nations now compatible with the digital RMB and cross-border volumes exceeding $1.2trn, the system’s momentum has become unmistakable. While Western policymakers debate hypothetical threats, China has deployed a working alternative spanning 200 countries.

-------------

Has China stolen a march over the mighty United States in the next currency war? According to many reports, the Digital Renminbi (RMB) based transactions have exceeded USD $1.2 Trillion! How did this happen? Is the SWIFT system going, going, gone?

https://youtu.be/QAI86QQgRkg?si=lk7Ug174M7jtKGi4