Crypto-currencies have become such a major part of the monetary and financial system in some countries that it has become impossible for their governments, legislators, regulators, and major players in the economy to ignore them. In Pakistan, the numbers on cryptocurrencies are so large, that institutions are urging the relevant bodies to regulate them.
Pakistan and cryptocurrencies: $20 billion in wallets
The president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Nasir Hayat Magoon, said at a recent press conference, that Pakistani citizens hold $20 billion in cryptocurrencies. These figures are from the chamber’s research report.
Chainalysis “s Global Cryptocurrency Adoption Index ranks Pakistan third globally. This ranking is based on three indicators: the value of on-chain crypto transactions, the value of on-chain retail transactions, and the volume of peer-to-peer exchange. Chainalysis’ report published in November 2021, states that cryptocurrencies have registered a growth of 711% in Pakistan, during the last 12 months.
Call for regulation: towards facilitation or restriction of cryptocurrencies?
Given the volume of crypto currencies held by Pakistanis, Nasir Hayat Magoon calls on the government to regulate crypto currencies. In fact, he is not the only one to have made this call. The Sindh High Court (SHC) – Sindh is a Pakistani province – had ordered in October 2021, government bodies to work with the Pakistani SEC and the central bank, to create a regulatory framework on crypto-currencies within three months.
Pakistan’s SEC has been working on cryptocurrency regulation since 2020. The regulatory framework that will emerge, will likely have to take into account this boom in cryptocurrency adoption in the country, and defend the country’s fiat currency.
The deputy governor of the Central Bank of Pakistan, Jameel Ahmad, had announced back in 2019, that the institution planned to issue its digital currency by 2025. The central bank had issued a circular in 2018, prohibiting banks and other financial institutions from trading in cryptocurrencies.
Cryptocurrencies are gaining more and more ground in Pakistan. Will the latter take a cue from countries like India that don’t necessarily look favorably on crypto-currencies, or will it instead promote this adoption movement of bitcoin (BTC) and its cadets?