ISLAMABAD: Pakistan has seen a boom in trading and mining cryptocurrency, with interest proliferating in thousands of views of related videos on social media and transactions on online exchanges.
However, the global money laundering watchdog, the Financial Action Task Force (FATF), has called on the government to better regulate the industry despite it not being illegal. Pakistan is on the FATF’s grey list of countries it monitors for failing to check terror financing and money laundering.
“Half the members had no clue what it was and didn’t even want to understand it,” said committee member Ali Farid Khwaja, a partner at Oxford Frontier Capital and chairman of KASB Securities, a stock brokerage in Karachi. “But the good thing is someone set up this committee. 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.”
The head of the country’s central bank, Reza Baqir, said in April the authority was studying cryptocurrencies and their potential for bringing transactions happening off the books into a regulatory framework. “We hope to be able to make some announcement on that in the coming months,” he told CNN.
In February, one of the country’s leading universities, the Lahore University of Management Sciences, received a grant worth $4.1 million to study the technology from Stacks, a blockchain network that connects Bitcoin to apps and smart contracts.
LEGALISATION AND INVESTMENT
Institutions have at times treated those involved in the trade of cryptocurrency with suspicion, worried about possible associations with money laundering.
Despite the challenges, Pakistan’s crypto boom shows no signs of stopping.
Pakistan-based social media groups explaining how to trade and mine cryptocurrency abound, some with tens of thousands of followers on Facebook. On YouTube, cryptocurrency videos in Urdu have been viewed hundreds of thousands of times.
Online cryptocurrency exchanges, most based outside Pakistan, like Localbitcoins.com, have hundreds of Pakistani traders listed, some with thousands of transactions.
Apps like Binance and Binomo, which track and trade cryptocurrency, have more downloads than some of the country’s largest banks’ apps, according to web analytics company SimilarWeb.
“You cannot stop crypto, so the sooner Pakistan regulates things and joins the rest of the world, the better,” Ahmed, a crypto currency holder, said.