Hey there! Have you ever wondered what would happen if cryptocurrency was legal in Pakistan? It’s a question that has been on the minds of many Pakistanis since the government imposed a ban on cryptocurrencies in 2018. In this article, we will explore what could have happened if cryptocurrency was legal in Pakistan.
What is cryptocurrency?
Before we dive into the consequences of legalizing cryptocurrency in Pakistan, let’s first understand what cryptocurrency is. Cryptocurrency is a digital or virtual currency that uses cryptography for security. It operates independently of a central bank and can be used for online transactions. Some of the most popular cryptocurrencies include Bitcoin, Ethereum, and Litecoin.
Why was cryptocurrency banned in Pakistan?
In April 2018, the State Bank of Pakistan (SBP) issued a circular instructing all banks and financial institutions to stop dealing in cryptocurrencies. The circular cited concerns over money laundering, terrorist financing, and other illegal activities. Since then, the use of cryptocurrencies has been illegal in Pakistan.
What if cryptocurrency was legal in Pakistan?
If cryptocurrency was legal in Pakistan, it could have a number of positive consequences for the country’s economy and its people. Let’s take a look at some of them:
Increased foreign investment
Legalizing cryptocurrency could attract foreign investment to Pakistan. Many investors are interested in cryptocurrencies and the technology behind them, and if Pakistan were to allow the use of cryptocurrencies, it could become an attractive destination for such investors. This could help boost the country’s economy and create jobs.A 2022 study by the Institute of Policy Studies (IPS) estimated that legalizing cryptocurrency in Pakistan could attract up to $5 billion in foreign investment over the next five years.
Easier international transactions
Cryptocurrencies can be used for international transactions without the need for intermediaries such as banks. This could make it easier for Pakistanis to send and receive money from overseas, as well as for businesses to carry out international transactions.
Empowering the unbanked
Pakistan has a large population of unbanked people who do not have access to traditional banking services. Cryptocurrencies could provide an alternative means for these people to carry out financial transactions, without the need for a bank account. This could help empower the unbanked and provide them with greater financial freedom.
Legalizing cryptocurrency could encourage innovation in Pakistan’s tech industry. Blockchain technology, which underpins many cryptocurrencies, has the potential to revolutionize many industries, including finance, healthcare, and logistics. By allowing the use of cryptocurrencies, Pakistan could encourage the development of new and innovative blockchain-based solutions.
Pakistan is one of the largest recipients of remittances in the world, with millions of Pakistanis living and working overseas. Cryptocurrencies could provide a cheaper and faster way for Pakistanis to send money back home. This could help boost the country’s economy and improve the lives of millions of Pakistanis.
In conclusion, legalizing cryptocurrency in Pakistan could have a number of positive consequences for the country’s economy and its people. It could attract foreign investment, make international transactions easier, empower the unbanked, encourage innovation, and boost remittances. Of course, there are also potential risks associated with cryptocurrencies, such as money laundering and terrorist financing. However, with proper regulation and oversight, these risks can be mitigated. It’s time for Pakistan to consider legalizing cryptocurrencies and reaping the benefits they can bring.