The Crypto Council of Pakistan (PCC) exudes a rare trust, a quality that has helped to shoot at great heights in a short period. Established in March of this year, the Council is led by the Minister of State for Crypto and special assistant of the Prime Minister in Blockchain and Crypto, Bin Saqib Billal, who also serves as Executive Director (CEO).
Last month, at a high -level Bitcoin conference in the US, which was also attended by the children of US President Donald Trump, Saqib released the first strategic reserve of Bitcoin (SBR) of Pakistan.
But while the State Minister held meetings with cryptographic leaders, the political leaders back home raised questions about the rhythm to which the PCC was going. Legislators also expressed that cryptocurrencies were prohibited throughout the country. This defective dichotomy, according to legislators, could affect Pakistan’s position in the global cryptographic race.
The CEO of Antematter[dot]IO, a technological engineering company that builds solutions that use web3 and artificial intelligence (AI), race adds its perspective: “To a fundamental level and speaking in theory, decentralized assets and cryptocurrencies are great. But as with all good ideas, the implementation of the idea and the idea itself are two things that are completely different.”
When commenting on the visible lack of coordination between the different departments, Raza says: “First, the PCC presented the strategic reserve and shortly after the government unequivocally affirmed that the cryptographic is still illegal in Pakistan.
“This sends mixed signals to the international market and erodes the trust of investors.
“We are not still sure where the government is as a whole in cryptographic, bitcoin and digital assets.”
However, the discussion led the State Bank of Pakistan (SBP) to clarify that in 2018, when it advised their regulated entities to abstise in virtual assets (VAS), it meant a caution in a financial environment without legal and regulatory framework for said assets, not because the assets themselves were illegal.
Having had some clarity regarding the legality of cryptocurrencies, the country has begun to write a regulatory framework for digital and virtual assets; the last meeting of the PCC and other relevant stakeholders, including the officials of the Pakistan Stock Exchange and Securities Commission (SECP); SBP; and the ministers of the law and IT took place on June 5.
As Pakistan moves towards a situation of all eyes in the Crypto, experts have presented themselves with suggestions and precautions.
The former advisor to the Ministry of Finance, Dr. Khaqan Najeb, says: “The country must establish a clear and vision of the future for virtual assets, positioning itself as a progressive but cautious jurisdiction.
“This requires Combining Fuerte [anti-money laundering]/CFT [countering the financing of terrorism] Compliance with innovative regulatory policies and a transparent fiscal framework to support sustainable growth in the digital asset sector.
“Licenses and supervision must be implemented for cryptocurrency exchanges, custodians, wallet suppliers and decentralized financial platforms to guarantee financial integrity.”
According to official sources, Pakistan currently houses approximately 40 million cryptographic wallets, placing it among the most active digital asset markets worldwide.
“Worldwide, countries are adopting various approaches to virtual assets, adds Khaqan.
“While China maintains a strict ban, Singapore, Switzerland and the EAU are creating support ecosystems through clear guidelines and regulatory sandboxes.
“The EU is standardizing the rules in the Member States.
“Japan and Australia classify cryptocurrencies as legal property and are working in comprehensive frameworks, including AML/CFT obligations and tax policies.”
“With a young and expert in technology, Pakistan should invest in education on web 3.0, AI and the development of skills to empower young people and foster innovation,” says Khaqan.
Icaro flight?
Concerns about the country’s cryptographic objectives arose mainly after the government told the Permanent Committee of the National Assembly that the cryptocurrency trade was still prohibited throughout the country.
The metaphorical journey of the government between cryptography as a legal currency and a general prohibition of virtual and digital assets has made experts skeptical of government ability to regulate currency.
The director of research firm Topine Securities Shankar Talreja believes that regulating cryptography is quite challenging … since these regulations should comply with the FATF framework/guidelines of the FATF and the IMF.
“Due to the Nature without the borders of the crypts, it can be exploited, if it is not regulated or poorly regulated.”
“Pakistan is also selling itself as a potential center for energy -intensive digital industries, including bitcoins mining and AI data centers.
“The country recently assigned 2000 megawatts (MW) of electricity to admit data centers from Bitcoin Mining and AI.
“But this bold movement has generated criticism of experts who think that the Crypto council could be flying too close to the sun.”
They argue that, given the country of expensive energy sources such as LNG and coal, Bitcoin mining is financially unsustainable without government subsidies. This leads to the country to a Catch-22 situation.
If government brochures are approved, it could increase electricity costs for common citizens and small businesses. With already unsustainable electricity rates, the system is becoming increasingly unfeasible. The shortage of energy is coming, and common citizens are preparing for another round of tariff walks. And if not, the country will have to face high operational costs.
An energy expert, who spoke on condition of anonymity, explains: The generation of current replacement energy uses liquefied natural gas (LNG) imported at a cost of approximately 10 cents per kilowatt-hora (kWh).
This, he says, is significantly higher than the operational cost of less than 1 % per kWh for geothermal plants used in Bitcoins mining in numerous countries. “Is it economically viable to extract bitcoin? [in Pakistan]? “
But the current crisis goes far beyond energy, according to the expert. Pakistan lacks the necessary consistency for long -term projects, according to him.
“Several projects under the economic corridor of China-Pakistan (CPEC), once acclaimed as a transformative initiative, have been abandoned, he added.
“This is not just poor management; it is a pattern,” he adds.
Experts have also indicated internal disagreements about the country’s resources. “Minerals, many of them critical and valuable, have been auctioned at disposable prices, often acquired by politically connected elites,” says the energy expert. Consider the growing evidence of economic repression in regions such as Khyber Pakhtunkhwa and Baluchistan, where local populations are often the first to support the worst part of extractive policies and negligence. “How can Pakistan advance?” said.
The way forward
Najeb believes that Pakistan surplus electricity presents an opportunity for Bitcoin and Data Blockchain data centers led by the private sector.
“You can develop a commercially viable framework for the supply of marginal cost electricity, considering current energy costs and infrastructure challenges.”
It also advises to establish a dedicated authority that can trust “licenses, supervision and promotion of the tokenization of national assets and government debt, unlocking new ways for digital finances and exports.
“While new technologies carry inherent risks and are not all, Pakistan must develop institutional capacity, enforce compliance and educate consumers to mitigate fraud and systemic risks, thus taking advantage of Blockchain’s total economic potential and AI.”
“Cryptocurrency profits should be treated as fiscal capital earnings assets, providing clarity and equity that will encourage compliance and help formalize the large informal cryptocurrency market. As one of the main remittance receptors, more than $ 35 billion annually, Pakistan can benefit greatly through the adoption of remittance solutions based on the blockade of the blocks.
According to Naeem Ilyas Khanani, CEO of Magna Engineering PVT LTD, the independent system and the market operator (ISIS) could bring an era of “transparency, competition and efficiency.”
“[In 2024, the Cabinet Committee on Energy (CCoE) approved the formation of the ISMO].
In its case study on how Imism can transform the electrical sector of Pakistan, Khanani explains that efficient market mechanisms can facilitate optimized assignment and management [the country’s surplus power]make such operations more viable and profitable. ”
He adds that stable energy and with a competitive price and an ecosystem of compatible digital assets create an attractive environment for Global AI and Crypto Companies to invest and establish operations in Pakistan.
“This ecosystem, backed by key regulatory bodies such as SECP, SBP, PCC, DAAP and Blockchain Layer 1 as Nextgen, contributes directly to digital investment abroad (DFDI).
“The mining of AI and cryptography can be seen as a form of export of computing power,” adds Khanani.
By providing the necessary energy infrastructure and regulatory clarity, Pakistan has the opportunity to become a key player in these global digital industries, generating substantial export income.
According to Khanani, the compatible regulatory framework facilitated by ISIS, particularly in areas such as Renewable Energy Certificates (REC) and Carbon Credits, paves the way for the creation and export of new kinds of digital assets, even more diversifying the Pakistan export portfolio.
Whether Pakistan triggers or stops in the digital economy, not only will depend on ambition, but also on alignment, responsibility and a clear vision of its limits.
Aimal Siddiqui is the Chief of Business Business at The News International.
Header and miniature image through Canva
