Could cryptocurrency provide a solution to Pakistan’s economic problem? Well, the short answer is, Yes, but the country would have to take some tough decisions similar to neighboring Iran.
The Financial Action Task Force (FATF) is hard on Pakistan and the rationale is terrorism. Pakistan is going through one of the worst economic crises of its history and the country can use all measures.
Pakistan has made it onto the FATF greylist and the economy in dire need of stability has already been supported by the Middle Eastern and Gulf countries on top of an International Monetary Fund (IMF) bailout package.
Cryptocurrency status in Pakistan
The State Bank of Pakistan (SBP) initially imposed a trading ban on cryptocurrency directing all banks and financial institutions to bar all cryptocurrency related transactions and report all such transaction to relevant authorities.
Rumors that Pakistan would be regularizing cryptocurrency emerged in April 2019, when social media roared with the thought and the cryptocurrency community rejoiced. However, only a month later in March, the then Minister of Finance Asad Umar denied all such rumors.
Another mistake made by various media houses came when the SBP issued the new regulations for Electric Money Institutions (EMIs) it was thought that the country is moving towards cryptocurrency, however, Umar had put all such thoughts to rest.
Why Pakistan isn’t boarding the cryptocurrency bandwagon?
Given the current situation in Pakistan where the government is blaming the bad economic pressure on their predecessors, the country is running neck to neck with Iran on FATF discussion table.
Both Iran and Pakistan have been granted a deadline that would last until October 2019 to ensure compliance with the FATF guidelines or face the blacklist.
On the other hand, leading local media house Dawn.com reports that FATF has given Pakistan a tough list to work with and the IMF bailout needy government has not taken steps towards cryptocurrency amidst the terrorism issue raised by FATF.
The cryptocurrency community despite reportedly being operated from one hundred (100) different cities across the country and growing at four hundred percent (400%) growth rate is not on the country’s legal radar.
Why Pakistan should regularize cryptocurrency?
Looking at a few other examples from across the globe, if Pakistan manages to take the tough decision on cryptocurrency and decides to regularize cryptocurrency there may be some immediate setbacks. The FATF may go a little tough like the Marshal Islands case. However, in the end, the resilient emerge victoriously.
Taxation would increase by many folds since the cryptocurrency trading and other businesses are hundreds of billions of dollars’ industry. Even a fraction running through Pakistan would allow the country to increase the foreign exchange inflow in the country and the tax revenue would increase in turn.
Similar to the Philippines, where the CEZA decided to regularize cryptocurrency and has issues licenses to forty-eight cryptocurrencies so far, Pakistan can also reap a quick crop through license fees.
The services industry in Pakistan provides support in social media, content, and programming to millions of customers across the globe and the talent in the country, if harnessed properly can fill the existing programming needs in the blockchain sector.