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Pakistan is progressing towards the legalization of cryptocurrency trading, as stated by the newly appointed CEO of the Pakistan Crypto Council, Bilal bin Saqib, during an interview with Bloomberg TV on Thursday. The financially challenged nation aims to achieve this by creating a regulatory framework designed to attract international investments and incorporate blockchain technology into its economy.
For many years, the central bank of Pakistan has issued warnings against cryptocurrency, citing risks related to fraud, money laundering, and financial instability. Nevertheless, with Pakistan ranking ninth in the world for cryptocurrency adoption, Saqib noted that the demand for digital assets has become too significant to overlook.
With millions of active cryptocurrency users in the country, this initiative could position Pakistan as an emerging player in the global blockchain and Web3 landscape, he added. Saqib elaborated that various factors have influenced the country’s decision to shift its policy towards the legalization of cryptocurrency.
Approximately 15-20 million Pakistanis are already engaged in trading digital assets, indicating substantial local adoption. Furthermore, global trends, with countries such as the United States and the UAE adopting crypto-friendly regulations, exert pressure on Pakistan to remain competitive and not fall behind.
The potential for economic development is another crucial factor, as a regulated cryptocurrency sector could draw foreign investment and stimulate technological innovation. Additionally, the impact of global politics, particularly with former US President Donald Trump advocating for pro-cryptocurrency policies, has encouraged nations, including Pakistan, to reevaluate their positions on digital assets.
Pakistan has secured over 20 loans from the International Monetary Fund (IMF) since 1958, with the most recent loan of $7 billion approved in September 2024. The nation ranks as the fifth-largest borrower from the IMF. Upon receiving this loan, Pakistan committed to the IMF that it would be the final loan sought.
By integrating cryptocurrency trading into a regulated environment, the government can impose taxes on capital gains and trading activities. This additional source of revenue could assist in alleviating fiscal deficits and decreasing the country’s dependence on external loans.
A report from The News indicates that the IMF has recommended that the Pakistan Federal Board of Revenue include cryptocurrency gains in the national tax framework to help address bailout obligations.
Establishment of the Pakistan Crypto Council
Recently, Islamabad formed the Pakistan Crypto Council (PCC), tasked with developing regulations for cryptocurrency and ensuring adherence to international standards. The council is chaired by Finance Minister Muhammad Aurangzeb and comprises prominent figures, including the governor of the State Bank of Pakistan, the chairman of the Securities and Exchange Commission of Pakistan (SECP), as well as the federal IT and law secretaries.
As stated in a release from the finance ministry on March 14, the council’s main objectives are:
– To create clear regulatory frameworks for cryptocurrency trading.
– To safeguard investors and maintain financial stability.
– To promote blockchain innovation across various industries.
– To collaborate with international cryptocurrency organizations to implement best practices.
