Pakistan Sees an Explosion of Interest in Cryptocurrencies

Divya  |  Jul 17, 2021

Cryptocurrencies are becoming increasingly popular with the citizens of Pakistan, some of whom have even quit their jobs to mine and trade digital assets full time. The country’s crypto market has also caught the attention of the global anti-money laundering watchdog, FATF, which has called upon the government to create better regulations for the industry.

Education and Social Media's Role in the Rise of Cryptocurrencies in Pakistan

Pakistan’s embrace of cryptocurrencies can be contributed to heightened awareness cultivated through education and social media. The country’s educational system, in particular, has been supportive of the crypto trend. In February, the Lahore University of Management Sciences, one of Pakistan’s leading institutions, received a $4.1 million grant to study the technology from Stacks, a blockchain network that connects smart contracts and apps with Bitcoin.

Social media is also a major aspect that has informed public opinion on cryptocurrencies. A growing number of Pakistani crypto enthusiasts have resorted to platforms like Whatsapp, Facebook, and YouTube to spread awareness and receive updates on the market. Ghulam Ahmed, who left his job to pursue crypto trading and mining in 2014, is one of these enthusiasts. Apart from operating his own crypto consulting business, Ahmed runs weekly WhatsApp sessions to educate his fellow citizens on the intricacies of the market.

Top crypto influencers in Pakistan have tens of thousands of followers on Facebook while crypto-related Urdu content on YouTube is also in heavy demand. The emergent asset class’s influence is so ubiquitous that apps of the country’s leading banks are trailing the apps of trading platforms such as Binance and Binomo in terms of popularity.

At present, former TV host Waqar Zaka is one of the most vocal advocates of crypto in Pakistan. Zaka, like Ghulam Ahmed, has been running mining operations while lobbying the government to consider the legalization of the crypto industry. Now, Khyber-Pakhtunkhwa’s provincial government wants both of them to be on a committee studying the profitability of such operations.

Heightened Interest in Crypto Invites Regulatory Scrutiny

It’s almost inevitable for a burgeoning market to escape regulatory scrutiny and in Pakistan’s case, this has already happened. Although cryptocurrencies are not yet illegal in the country, the government’s lenient approach to the sector has caught the attention of the Financial Action Task Force(FATF). Pakistan is currently on FATF’s grey list due to its association with money laundering and terrorism financing. Therefore, the agency has asked the country to tighten regulations around crypto operations.

To address FATF’s concerns, Pakistan’s federal government has created a committee to study cryptocurrency regulations. This group will include observers from the FATF, federal lawmakers, and heads of the different intelligence agencies. The  chairman of KASB securities, Ali Farid Khwaja recently noted, “The relevant bodies in the government who need to get things done are supporting it, and the promising thing is nobody wants to stand in the way of technical innovation.”

 

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