Pakistan is one of the emerging markets in Southeast Asia with a population of approximately 250 million people, and is a country where the majority of its population lives below the poverty line.
The people of Pakistan are optimistic. Many believe that good times are coming, and that the country's future is bright amid the political chaos and deteriorating financial situation of 2023. However, the overall situation appears to be on the right track, with the Karachi Stock Exchange (KSE) reaching its historic high. Highest levels in time.
Bitcoin Pakistan, a community of like-minded tech and Bitcoin enthusiasts in Pakistan, organized its first physical networking event in Lahore last month, in November. There is growing interest in understanding Bitcoin as an inflation hedge and a global payments network.
However, people in Pakistan are also afraid of the legality of cryptocurrency; It seems that many are reluctant to speak publicly about this, fearing repercussions from the authorities. There is a common misconception 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 growing demand and usage of Bitcoin in the country, the Central Bank of Nigeria lifted the ban in its latest circular, providing clear instructions.
The Central Bank of Nigeria stated the following:
“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 crypto assets.”
In contrast, the State Bank of Pakistan, through its circular issued in 2018, warned the public that cryptocurrencies are not legal tender, issued or guaranteed by the Government of Pakistan. Moreover, BSP has clarified that it does not authorize or license any individual or entity to issue, sell, buy, exchange or invest in any of these virtual currencies (VCs)/coins/tokens in Pakistan. Therefore, all regulated entities have been advised to refrain from processing, using, trading, holding, transferring value, promoting and investing in virtual currencies/tokens.
On the other hand, Bitcoin adoption 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 get Bitcoin in Pakistan.
The number may not be exact, but it appears that Pakistan ranks first among countries in Bitcoin adoption rate in emerging markets in the developing world.
Pakistan's rapid adoption of Bitcoin can also be explained when we look at annual inflation, exceeding 25% which has worsened over the past few years amid political chaos and pressure from the International Monetary Fund (IMF).
The freelancing industry is booming, and Pakistan is one of the largest exporters of IT services. The freelance community has shifted towards storing a significant portion of their wealth in foreign currency such as US dollars or British pounds, and the number of freelancers holding Bitcoin or USDT as an inflation hedge has increased significantly since the coronavirus crisis.
Bitcoin is an unstoppable revolution; Many other countries have recognized this and are developing regulations to keep pace with innovation in the digital world. With friendly regulations from the government and a strict crackdown on cryptocurrency scams in Pakistan, it could open doors to new opportunities and attract huge investments that can help pull 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 the opinions of BTC Inc or Bitcoin Magazine.
