Blockchain intelligence firm Chainalysis placed Pakistan eighth in The 2023 Global Crypto Adoption Index Top 20. In 2021 and 2022, Pakistan was sixth and third, respectively. This indicates that cryptocurrency is popular among the people in Pakistan. In recent times, when the Pakistani economy has been struggling, with the value of the Pakistani rupee declining significantly, people are believed to be using cryptocurrencies as a hedge against inflation and uncertainties. While cryptocurrencies are banned in Pakistan, they are increasing in popularity and adoption.
While banning cryptocurrencies doesn’t solve any problem, besides being outrightly ineffective as people can still find ways to invest in digital assets, having a clear policy for the digital assets sector can benefit both the people and the nation as it would earn taxes on transactions of digital assets.
Regulators often cite the potential misuse of cryptocurrency in illicit activities such as money laundering and terrorist financing. However, with precise regulation, these concerns can be addressed. The transformative potential of blockchain technology and decentralised finance is not only evident but also compelling.
By providing clear laws and rules for legitimate trade and holding of digital assets, Pakistan can earn taxes on all the investments going into cryptocurrencies. It will bring clarity across the spectrum in the digital asset market, and the benefits will be more visible.
The approval of Bitcoin ETFs and their spectacular performance over the past two months clearly indicates a strong demand for digital asset products globally. Debt-bond tokenization and trading settlements in the stock market through digital assets are promising new horizons of digital assets. Then, you have defi and NFTs! It’s hard to ignore these innovations and their benefits.
In the existing Web2, user-generated content earns revenue for the platforms where users contribute, while in the blockchain-powered Web3, users who contribute to the internet will earn for their content. By not giving the blockchain and digital asset sector its due, Pakistan is denying itself the benefits that this sector will generate in the future.
If Pakistan starts taking digital assets seriously, it has to begin by introducing regulations and educating people about the potential risks and benefits.