 "Cash-strapped Pakistan plans to legalise crypto to spur foreign investment")
Pakistan is moving towards legalising cryptocurrency trading, newly appointed CEO of Pakistan Crypto Council Bilal bin Saqib said in an interview with Bloomberg TV on Thursday. The cash-strapped country plans to accomplish this by establishing a regulatory framework aimed at attracting international investment and integrating blockchain technology into its economy.
For years, Pakistan's central bank has warned against cryptocurrency, citing concerns over fraud, money laundering, and financial instability. However, with Pakistan ranking ninth globally in crypto adoption, it has become clear that the demand for digital assets is too large to ignore, Saqib said.
With millions of crypto users already active in the country, this move could position Pakistan as a rising player in the global blockchain and Web3 ecosystem, he added.
Why Pakistan wants to legalise crypto trading
Saqib explained that several factors have contributed to the country's decision to make this major shift in policy towards crypto legalisation.
An estimated 15-20 million Pakistanis are already trading digital assets, highlighting significant local adoption. Additionally, global trends, with countries like the US and UAE embracing crypto-friendly policies, put pressure on Pakistan to stay competitive and avoid being left behind.
The potential for economic growth is another key driver, as a regulated crypto sector could attract foreign investment and foster technological innovation.
The influence of global politics, particularly with US President Donald Trump pushing pro-crypto policies, has prompted nations, including Pakistan, to reconsider their stance on digital assets.
Notably, Pakistan has taken more than 20 loans from the International Monetary Fund (IMF) since 1958, with the latest being approved in September 2024 for $7 billion. The country stands as the fifth-largest debtor to the IMF. At the time of the loan approval, Pakistan assured the council that it would be their last loan.
By bringing crypto trading into a regulated framework, the government can tax capital gains and trading activity. This new revenue stream would help reduce fiscal deficits and lower the country's reliance on external borrowing.
According to a report in The News, the IMF has suggested the Pakistan Federal Board of Revenue to bring crypto gains into the country’s tax net to help cover bailout debts.
Pakistan Crypto Council established
Last week, Islamabad established the Pakistan Crypto Council (PCC), which will be responsible for drafting crypto regulations and ensuring compliance with international standards. The council is led by Finance Minister Muhammad Aurangzeb and includes key figures such as the governor of the State Bank of Pakistan, chairman of the securities and exchange commission of Pakistan (SECP), and the federal IT secretary and federal law secretary.
According to a release by the finance ministry on March 14, the council’s primary goals include:
- Establishing clear regulatory guidelines for crypto trading.
- Ensuring investor protection and financial stability.
- Encouraging blockchain innovation across various sectors.
- Collaborating with international crypto organisations to adopt best practices.
India's stance on cryptocurrency trade
Cryptocurrencies in India are not regulated. India has maintained that cryptocurrencies are not legal tender and has generally discouraged trading. In 2021, the government even proposed a ban on private cryptocurrencies. However, last month media reports emerged suggesting that the central government may be reviewing its current stance following global cues as more nations move toward crypto-friendly policies.
Till date no formal announcement has been made.