Pakistan Grapples with Unregulated Cryptocurrency Boom
Pakistan's economy is facing significant challenges due to the rapid growth of cryptocurrency adoption without a regulatory framework. The country holds approximately $20 billion in digital assets, with around 40 million operational crypto wallets. The Virtual Asset Ordinance 2025 has been passed, and the Pakistan Crypto Council (PCC) has been established, but concerns remain about financial frauds and the lack of regulation.
The decentralized system approach of cryptocurrencies is being questioned as more than half of project revenues flow through fiat-pegged tokens issued by centralized entities. This raises concerns about the centralization of power and control. The report also highlights the risks associated with crypto transactions, including financial frauds, human trafficking, and violent crimes.
The country's economy is vulnerable to further shocks due to consistently high inflation, fiscal pressure, and a weak financial infrastructure. Using imported energy for crypto mining is highly questionable, exposing the economy to new risks. The State Bank of Pakistan (SBP) needs to take a clear stance on regulating or banning cryptocurrencies.