Pakistan is one of the emerging markets of Southeast Asia with a population of approximately 250 million and a country where the majority of the population lives below the poverty line.
The people of Pakistan have hope; many believe that good times are ahead and the country's future is bright amid political chaos and a shaky financial situation by 2023. However, the overall situation seems to be heading on track, with the Karachi Stock Exchange (KSE) reaching its historical maximum. time maximums.
“bitcoin Pakistan”, a community of like-minded bitcoin and technology enthusiasts in Pakistan, organized its first physical networking event in Lahore last month in November. Interest in understanding bitcoin as an inflation hedging tool and a global payments network is increasing.
However, people in Pakistan also fear the legality of cryptocurrencies; many seem reluctant to speak publicly about it, fearing consequences from the authorities. There is a common misunderstanding that bitcoin is banned or illegal in Pakistan.
The Central Bank of Nigeria imposed a similar ban on cryptocurrency transactions through banks in 2021. However, after witnessing the rise in demand for bitcoin and its use in the country, the CBN lifted the ban in the latest circular , providing clear instructions.
The Central Bank of Nigeria stated:
“However, current trends globally have shown that there is a need to regulate the activities of virtual asset service providers (VASPs), which include cryptocurrencies and cryptoassets.”
On the contrary, the State Bank of Pakistan, through its Circular issued in 2018, warned the public that cryptocurrencies are not legal tender, nor are they issued or guaranteed by the Government of Pakistan. Further, the SBP clarified that it does not authorize or license any individual or entity for the issuance, sale, purchase, exchange or investment in such Virtual Currencies (VC)/Coins/Tokens in Pakistan. Therefore, all regulated entities were advised to refrain from processing, using, trading, holding, transferring value, promoting and investing in virtual currencies/tokens.
bitcoin adoption, on the other hand, has increased significantly in Pakistan, despite there being no regulated exchange in the region. People use peer-to-peer services like Binance, Paxful and other OTC trading methods to purchase bitcoins in Pakistan.
The figure may not be precise, but it seems that Pakistan is among the top countries in bitcoin adoption rate in the emerging markets of the developing world.
Pakistan's rapid adoption of bitcoin can also be explained when we look at annual inflation, which is over 25% and has worsened over the past few years amid political chaos and pressure from the International Monetary Fund (IMF).
The freelancing industry is thriving and Pakistan is one of the leading exporting countries for IT services. The freelancer community has chosen to store a significant portion of its wealth in foreign currencies, such as USD or GBP, and the number of freelancers holding bitcoin or USDT as a hedge against inflation has increased significantly since the COVID crisis.
bitcoin is a revolution that cannot be stopped; Many other nations have taken notice and are working to craft regulations that keep up with innovation in the digital world. With friendly regulations by the government and a strict crackdown on crypto frauds in Pakistan, it can open doors to new opportunities and attract huge investments that can help lift Pakistan out of its debt crisis.
This is a guest post by Farooq Ahmed.. The opinions expressed are entirely their own and do not necessarily reflect those of btc Inc or bitcoin Magazine.
