Pakistan Moves to Regulate Digital Assets, Aims to Attract Global Crypto Investment

Pakistan is on the verge of developing a regulatory framework for digital assets, a strategic move aimed at attracting international investment and bolstering its local cryptocurrency ecosystem. Bilal bin Saqib, CEO of the government-backed Pakistan Crypto Council (PCC), emphasized the importance of this initiative, which seeks to integrate blockchain and crypto innovations into the national financial system.

Saqib highlighted that the timing of this move is crucial, driven by the belief that a return of a certain political figure to the White House could significantly boost the cryptocurrency industry. He noted that this figure made history as the first sitting US president to speak at a Bitcoin or crypto conference in New York, indicating a potential bullish catalyst for the industry.

Saqib explained that the formation of a crypto working group and the creation of a US Bitcoin Reserve by this figure would position the largest economy in the world as a leader in digital assets, similar to how it stockpiles gold or oil for security and strength. This pro-crypto stance by the US could influence other countries to adopt similar policies, with Pakistan being one of them to avoid the risk of being left behind.

Pakistan aims to create a favorable environment for blockchain and cryptocurrency innovation, encouraging investment, adoption, and growth. Saqib's vision is to make Pakistan a frontrunner in blockchain-powered finance, attracting global investment. The country presents itself as a low-cost, high-growth market, bolstered by a youthful demographic where a significant portion of the population is under 30. Additionally, Pakistan has a workforce ready to build in the Web3 space.

When asked about the legalization of cryptocurrencies, Saqib reiterated the goal of establishing a clear regulatory framework for digital assets in the country. He emphasized that the focus would be on providing stability, scalability, and a transparent regulatory framework for international investors. Efforts are underway to establish regulatory sandboxes to expedite the operational processes for crypto startups within a controlled and compliant environment.

Compared to established hubs, Pakistan has competitive advantages such as lower operational costs and a substantial domestic market. The country plans to leverage the regulatory experiences of nations currently leading in this field, including the UAE, Nigeria, Turkey, and Singapore, through direct engagement and collaborative learning to refine and implement its own regulatory approach.

On the matter of crypto taxation, Saqib stressed that overtaxation could hinder innovation. Pakistan plans to adopt a balanced, pro-growth tax structure to incentivize crypto businesses, ensuring compliance with guidelines while attracting international investors. Currently, cryptocurrency is not fully legalized in Pakistan, but major developments are underway.

The State Bank of Pakistan (SBP) has proposed a framework to recognize digital assets, including cryptocurrencies, as legal currency. This proposal, if approved by the federal government and parliament, could potentially allow digital currencies like Bitcoin to gain legal tender status. Pakistan aims to become a hub for cryptocurrency in South Asia, indicating a shift towards embracing blockchain technology and digital currencies.