Tuesday, April 2, 2019

Pakistan State Bank Targets Digital Currency by 2025 and Fully Digital Economy by 2030

A top official of the State Bank of Pakistan, the nation's central bank, announced that the institution aims to issue a digital currency (Central Bank Digital Currency or CBDC) by 2025, according to media reports.   Speaking at the launch of regulations of Electronic Money Institutions (EMIs), central bank officials said that EMIs will be non-bank entities to be licensed by the central bank to issue e-money for the purpose of digital payments.  Pakistan's finance minister Asad Umar and the central bankers said they are targeting Pakistan's economy to go fully digital by 2030.

“As we move towards digital economy, it is absolutely important to ensure cybersecurity,” said the finance minister, according to Dawn newspaper.  Mr. Umar added that even a single high profile incident could cause irreparable loss of confidence to the economy and the banking system.

Deputy Governor Jameel Ahmad of the State Bank of Pakistan told the audience at the EMI launch that the central bank is working on a concept of issuing digital currency by year 2025 to promote financial inclusion and reduce inefficiency and corruption. Moreover, he said, the central bank would adopt evolving-realities of time and would be fully digitized and technology equipped by year 2030.

Cryptocurrencies use blockchain technology. Bitcoin is the name of the best-known cryptocurrency, the one for which blockchain technology was invented. A cryptocurrency is a medium of exchange, such as the US dollar, but is digital and uses encryption techniques to control the creation of monetary units and to verify the transfer of funds. The blockchain is a decentralized ledger of all transactions across a peer-to-peer network. Using this technology, participants can confirm transactions without a need for a central clearing authority. Potential applications can include fund transfers, settling trades, voting and many other issues.

Peer-to-peer cryptocurrencies such as Bitcoin were often explicitly aiming to disrupt the existing monetary order – central banks will aim for an evolutionary approach. In many ways, central bank digital currencies (CBDC) would simply be the latest in a long line of technological upgrades that central banks have been through over the years, according to ING Bank.

There's a long history of the use of money as a medium of exchange in trade. It started with metal coins in Mesopotamia, then changed to paper currency in China and bank checks (sakks) in Arabia before becoming electronic in modern age.  Here's how International Monetary Fund (IMF) chief Christine Lagarde answers the question "should central banks issue a new digital form of money?"

"A state-backed token, or perhaps an account held directly at the central bank, available to people and firms for retail payments? True, your deposits in commercial banks are already digital. But a digital currency would be a liability of the state, like cash today, not of a private firm. This is not science fiction. Various central banks around the world are seriously considering these ideas, including Canada, China, Sweden, and Uruguay. They are embracing change and new thinking—as indeed is the IMF. ...... I believe we should consider the possibility to issue digital currency. There may be a role for the state to supply money to the digital economy. This currency could satisfy public policy goals, such as (i) financial inclusion, and (ii) security and consumer protection; and to provide what the private sector cannot: (iii) privacy in payments".


Related Links:

Haq's Musings

South Asia Investor Review

Fintech Revolution in Pakistan

E-Commerce in Pakistan

The Other 99% of the Pakistan Story

FMCG Boom in Pakistan

Pakistan's Financial Services Sector

Bank Deposits Growth in Pakistan

Riaz Haq's Youtube Channel

Viewpoint From Overseas Channel 

22 comments:

Riaz Haq said...

World Bank Report: #Technology is transforming #governance in #Pakistan. 64 million #internet connected #digital-savvy, #Pakistanis are now expecting better digital services from their #government.
http://tinyurl.com/y2ef4cx2 via @WorldBank

To meet these demands, the Government of Punjab has been working to modernize over the last decade.

As part of the government’s governance reforms, and learning from earlier pilot programs in education and health, the Punjab Public Management Reform Program (PPMRP) has aimed to transform citizens’ experience, improve access to administrative services, and boost public employee performance and the management of public resources.

Before that, Punjab authorities were facing several challenges in delivering public services. This, in turn, impacted social outcomes in the province: the health sector’ performance was affected by the absenteeism of vaccinators, resulting in a low immunization rate in Punjab (49% in 2014).

The education and agriculture departments faced similar absenteeism issues with teachers, students, and agriculture workers in the field.

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Citizens now have easy access to information about institutions, policies, procedures, and investment projects available on the websites of 84 provincial public entities, including government administrative departments, attached bodies, hospitals, and universities.

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The number of inquiry and feedback calls increased from 50,000 calls received in 2013 to 2.9 million in 2018. Province-wide, 161 citizens’ facilitation centers have been set up to provide selected services under one roof and closer to the citizens – promoting social accountability in Pakistan’s largest province.

PPMRP also helped expedite the online provision (application and processing) of other government services, such as registering a vehicle, paying for stamps, collecting agriculture subsidies, and applying for a government job and college admissions.

Smart management to improve staff performance

The PPMRP also developed smart management tools to help some government departments improve their staff performance and overall user experience.

For example, smartphone applications and central dashboards helped track and analyze daily more efficiently the activities of hundreds of field workers in the health, agriculture and education departments.

Combined with users’ feedback, this data helped identify low performing areas and take remedial measures.

In the health field, E-VACCS has been instrumental in tackling absenteeism of field vaccinators by locating their daily activity routes (and activities), thereby enabling the management of Health Department to check whether children in remote areas had received their vaccinations.

As a result, immunization coverage marked a rise from 49 percent in 2014 to 84 percent in 2017.

Similar tools have helped assess staff performance in schools and the agriculture sector and, when applicable, informed remedial actions for improvement.

Digitizing tax collection

The PPMRP also supported technology solutions to collect taxes better, thus expanding the tax base and improving transparency.

For example, old manual cadasters of urban properties have been digitized and geo-mapped in all 36 districts of Punjab, adding more than 1 million new properties to the tax base.

This system helped issue digital tax invoices and provide an online tax calculator and online property title verification system. Citizens can also now access detailed information about transactions and when their payments are due.

As a result, the urban property tax receipts in Punjab have increased by 115 percent since 2013.

Together, these promising initiatives and reforms have changed the governance landscape in Punjab and brought government services a step closer to citizens.

Riaz Haq said...

5G to establish foundation for #Pakistan's digital economy. #5G #mobile #broadband offers massive potential to boost #DigitalTransformation in #Pakistan as the country has already derived some benefits from digitization, according to the World Bank . https://tribune.com.pk/story/1933011/2-5g-establish-foundation-digital-economy/

Fifth generation (5G) mobile broadband possesses massive potential to boost digital development in Pakistan as the country has already derived some benefits from digitisation, according to a World Bank report titled ‘Pakistan @100: Shaping the Future’.

Although the Pakistan Telecommunication Authority (PTA) had unveiled a road map for public testing of 5G services in the country this year, delays in its deployment would postpone a revolutionary leap in capacity from 4G to 5G, the report said.

The World Bank in its report revealed that delay in the issuance of 3G and 4G licences, which were eventually completed in 2014, prevented telecom companies from building and upgrading their networks for the provision of data services. Moving forward, “5G networks will establish a robust foundation for a digital economy in the country,” it said. “Although Pakistan has already derived some of the benefits from digitisation, the scope for further growth still remains.”

Quoting figures, the World Bank pointed out that demand for internet access had risen rapidly, from 6 million internet subscribers in 2013 to an estimated 48 million in 2017.

Moreover, Pakistan is the third-largest country providing workers to global online freelancing platforms and from this, it generated approximately $1 billion in export revenues in 2016.

“However, broadband and mobile penetration (basic and data/internet-enabled mobile phones) in Pakistan remains relatively low,” the report said.

It emphasised that further network expansion and quality improvements would improve mobile broadband access and could ensure access to underserved and unserved areas.

Digital development should come with safeguards including national cyber security and personal data privacy, it suggested. At the same time, providing an enabling environment for a competitive and open market for telecom and digital players and digital skills for potential employees was critical to ensuring meaningful uptake of digital solutions,” it continued.

Riaz Haq said...

C/A Deficit = 22% ⬇️
Trade Deficit = 11% ⬇️
Imports =6% ⬇️
External loans(July-March)= 37% ⬇️

Remittances = 11.8% ⬆️
Exports = 2% ⬆️
FDI inflow(excluding china) = 17% ⬆️
Forex Reserves = ⬆️ than 25/7/2018
Private Sector Credit = ⬆️

https://twitter.com/MusaVirk18/status/1113832802439450624

Riaz Haq said...

THE EXPRESS TRIBUNE > BUSINESS
Trade deficit contracts 11% to $21.5b in eight months


https://tribune.com.pk/story/1928130/2-trade-deficit-contracts-11-21-5b-eight-months/


Pakistan’s trade deficit contracted over 11% to $21.5 billion in first eight months of the current fiscal year, primarily because of a steep decline in imports but the growth in exports remained sluggish, underscoring the need for a review of the policy of subsidising exporters.

Exports, both on month-on-month and year-on-year basis, fell in February 2019, which put a question mark over the claims made by the Ministry of Commerce while giving huge fiscal incentives to the exporters, especially the textile sector. Despite the fiscal incentives and currency depreciation, the exports stood below $2 billion in February.

Trade deficit that stood at $24.2 billion in July-February FY18 shrank 11% to $21.5 billion in the corresponding period of current fiscal year 2018-19, the Pakistan Bureau of Statistics (PBS) reported on Tuesday.

https://storage.ning.com/topology/rest/1.0/file/get/1774748318?profile=RESIZE_710x

Riaz Haq said...

#ImranKhanPrimeMinister chairs meeting on #digitalization of #government processes in #Pakistan. The discussion encompassed transparency and efficiency in government processes using emerging technologies like #blockchain. https://www.thenews.com.pk/latest/459262-pm-imran-chairs-meeting-on-digitalization-of-government-processes

Prime Minister Imran Khan on Wednesday chaired a meeting on digitalization of the government processes and how the latest IT solutions such as blockchain could help ensuring efficiency, transparency, eliminating red-tapism and improving overall service delivery in line with the vision of the Government.

A team of Pakistani IT experts from UAE, invited by Special Assistant to Prime Minister Sayed Zulfiqar Abbas Bukhari, briefed the Prime Minister on way forward in digitalization of various government processes.


The discussion encompassed transparency and efficiency in government processes using emerging technologies like blockchain.

From among the proposed use-cases, the briefing focused on a next generation trade platform for Pakistan that will usher Pakistan into the next era of trade efficiency with its trade partners.

The Prime Minister in his remarks said that digitalization is critical to ensuring efficiency and transparency in conduct of official businesses.

He said IT solution will help addressing some of the major issues that have hampered steady growth of economy in past.

“The digitalization will also create much needed synergies among the government organizations for ensuring friction-less service delivery and improving ease of doing business in the country,” he added.

Riaz Haq said...

#3G/#4G #Mobile #Broadband Subscribers in #Pakistan Reaches 66.14 Million in March 2019 https://www.phoneworld.com.pk/3g-4g-subscribers-in-pakistan-reaches-66-14-million/


The number of 3G and 4G users in Pakistan reached 66.14 million by end March 2019, said Pakistan Telecommunication Authority (PTA). The number of mobile phone users in Pakistan reached 159.024 million by end-March compared to 156.92 million by end of February, which registered an increase of 2.104 million during the period under review.

Jazz’s total count for 3G users stood at 13.622 million by end-March compared to 13.714 million by end February, registering a decrease of 0.0092 million. Jazz 4G user numbers jumped from 8.144 million by end February to 8.774 million by end-March.

3G/4G Subscribers in Pakistan
Zong 3G subscribers increased from 8.738 million by end February to 8.764 million by end-March while the number of 4G users jumped from 11.026 million by end February to 11.600 million by end March 2019.

The number of 3G users of Telenor network decreased from 8.851 million by end February to 8.764 million by end-March 2019 i.e. registering 0.087 million. The number of 4G users jumped from 5.569 million by end February to 5.905 million by end-March.

Ufone 3G users decreased from 8.162 million by end February to 7.846 million by end-March registering a decline of 0.316 million. Teledensity for cellular mobile increased from 76.3 percent by end February to 77.17 percent by end-March and broadband subscribers reached 68244373 by end-March compared to 66704731 by end February.

PTA received 13685 complaints from telecom consumers against different telecom operators including (cellular operators, PTCL, LDIs, WLL operators and ISPs) as of March 2019. According to PTA data Jazz (Mobilink + Warid) leads the chart with 3881 complaints and Telenor stands at the second position as the most complained telecom operator with 2738 complaints. PTA said that it was able to get 13676 complaints resolved i.e. 99.93 percent.

Cellular mobile subscribers constitute a major part of the overall telecom subscriber base, therefore, a maximum number of complaints belong to this segment. A total number of complaints against CMOs by February stood at 10684.

In terms of the segregation of complaints on operator basis, a total of 3881 complaints were received against Jazz which is 36.32% of the total CMO related complaints. Telenor, which has the second largest number of consumers, was also second with 2738 i.e. 25.62 percent complaints were received against it. Zong stood third with 2396 complaints i.e. 22.42 percent of total complaints.

Ufone had 1669 complaints against its various services which make up 15.62 percent of the total CMO related complaints. PTA also received 1286 complaints against basic telephony where 1281 were addressed during March 2019. Further 1690 complaints were received against ISPs where 1686 were addressed.


https://www.pta.gov.pk/en/telecom-indicators

Riaz Haq said...

Pakistan currency in circulation up 18.12pc to Rs3.402 trillion

https://www.thenews.com.pk/print/184885-Currency-in-circulation-up-1812pc-to-Rs3402-trillion

KARACHI: Hard currency in circulation – cash in hands – rose 18.12 percent to Rs3.402 trillion as of December 2016 over the preceding year as people were giving preferences to nonbanking transactions.


The State Bank of Pakistan, in its latest report, showed that currency in circulation (CiC) amounted to Rs2.880 trillion as of December 2015. Currency in circulation jumped to Rs3.34 trillion in the mid of last year.

“Rising currency use, in our view, reflects the falling opportunity cost of holding cash,” said Bilal Khan, an economist at Standard Chartered Bank. “This is due to a combination of falling returns on deposits as a means of saving – due to monetary easing – as well as the incidence of tax on the use of the banking system for certain transactions.”

Last year, the government extended the scope of withholding tax on banking transactions by non-filers of returns.

Chief Executive Officer Sakib Sherani at Macroeconomic Insights said the volume of currency in circulation and its rapidly-rising trend vis-à-vis both the monetary base as well as deposits in the banking system are indeed worrying signs.

“This trend goes against the norms of a documented economy and a banking system that is playing an effective role of financial intermediation and inclusion,” Sherani said. “Prima facie it appears that the government’s taxation policy is a major cause for the shift from bank deposits to CiC.”

Pakistan’s informal economy is almost as big as the formal one, perhaps larger. It’s a source for concern for the government as it doesn’t generate revenue to national exchequer.

“The level of CiC can be taken as a broad proxy for the degree of informalisation of the economy and its trend,” Sherani said.

Economists are surprised why CiC is surging amid falling inflation and relatively low transactions into the real estate sector after the upward revision in the property valuation and subsequent changes in the tax rules.

“Though a demand in urban consumption is picking up, yet inflation remains at the lower side,” said Salman Shah, former finance minister.

“We can’t rule out that some currency may be used for all kind of illegitimate activities.”

Currency in circulation, as percent of M2 and currency-to-deposit ratio, has also been increasing over the last few years.

Analysts said though banking deposits grew 20 percent in 2016, yet stakeholders need to render more efforts to increase the penetration of formal banking services into the economy in line with the national financial inclusion strategy. Bank deposits rose to Rs11.2 trillion in December 2016 from Rs9.3 trillion in December 2015.

Riaz Haq said...

#Digital #Pakistan: Increasing digitization and #internet accessibility make Pakistan's e-commerce market one of the fastest growing in the world. Size of #ecommerce market is up by 92% to 99.3 billion rupees ($640.3 million) during the fiscal year 2017-18 http://www.globaltimes.cn/content/1163302.shtml#.XXBF_novZYI.twitter

The number of registered e-commerce merchants was 496 in the first quarter of the fiscal year 2017-18, reaching nearly 1,100 by year end, and was over 1,200 in the first quarter of 2018-19, showing an exponential growth in e-commerce activities in the country.

Pakistan has e-commerce companies in almost every major sector from retail and ride-hailing to property and car purchasing. Benefits such as lower transaction costs, ease of selection of various products while sitting at home, wider selection range, opportunity for making informed purchase decisions based on online reviews and on-time delivery process are the main sources of attraction for consumers, paving the way for the industry to flourish.

Leading online businesses in Pakistan in retail are Daraz, Yayvo and HumMart, whereas ride-hailing services have been overtaken mostly by the global and regional giants Uber and Careem.

Additionally, PakWheels and Zameen are the largest online marketplaces for car and property shoppers and sellers in Pakistan. Among food delivery service providers, FoodPanda is most popular.

The industry has not only helped major players in expanding their businesses, it is also an effective tool for small- and medium-sized enterprises due to low costs and increased accessibility of sellers to customers.

In its efforts to increase the growth and development of the industry, the federal government has recently framed a draft e-commerce policy aimed at achieving higher export growth through enhanced activities from e-commerce platforms, promoting small e-businesses and creating employment opportunities.

The main goal of the policy is to augment the e-commerce industry's growth to make it one of the key drivers of Pakistan's economy.

Though data shows a steady rise in digital transactions and the number of registered vendors, the country's successful e-commerce entrepreneurs believe that Pakistan can learn much from China to further boost the industry, which is still in its infancy, as the latter has an immense knowledge base, experience and advanced technology in this field.

In a conversation with the Xinhua News Agency, Adam Dawood, head of Yayvo, one of Pakistan's largest online retailers, said that China is the world's biggest e-commerce market with annual online sales worth hundreds of billions of dollars.

As a neighboring country, China is eyeing the huge untapped potential in Pakistan, with Chinese e-commerce player AliExpress, part of tech giant Alibaba, recently acquiring Daraz.

"Apart from investment in Pakistan, China has such a big market for products that we could increase our product assortment overnight," Dawood said, adding that there is a lot of learning required in terms of product-market fit, legislation, and route to market that would help Pakistan increase not just the online shopping base, but also the internet penetration rate.

Talking about the challenges the e-commerce industry is facing, Dawood said that Pakistan needs to focus on optimizing overall service delivery and customer experience aspects.

"Our logistics and payments systems need to evolve to be better suited; it behooves the government to pass legislations and cooperate and collaborate with regional players including China to further support and actively promote the digital businesses."

Pakistan needs to encourage Chinese enterprises to explore opportunities in the Pakistani e-commerce industry and join with local start-ups for new business ventures, said Shehryar Hydri, secretary general of the Pakistan Software Houses Association, a trade body promoting and developing software and services industry in Pakistan.

Riaz Haq said...

#Pakistan to Set up Two State-Owned #Bitcoin Mining Farms to Help Boost #Economy. The capacity of the mining farms or the funds that the state intends to invest in the project are not known yet. #KP has previously advocated friendly crypto laws. https://news.bitcoin.com/pakistan-to-set-up-two-state-owned-bitcoin-mining-farms-to-help-boost-economy/ via @BTCTN

The government of Khyber Pakhtunkhwa (KP), the third largest of Pakistan’s four semi-autonomous provinces, is setting up two state-backed bitcoin mining farms, local media reported last week.

Ziaullah Bangash, advisor to the chief minister of KP on Science and Information Technology, said the provincial parliament passed a bill allowing the KP government to use its own money to establish the mining facilities.

The province, which has since legalized crypto mining, will be mining bitcoin (BTC) for profit, BOL News, a local media organization, reported. No details were given about the capacity of the mining farms nor the funds that the state intends to invest in the project. This particular province has previously advocated friendly crypto laws in Pakistan.

According to Bangash, the KP Assembly also passed a separate no-objection certificate allowing individuals to mine cryptocurrency and issue their own digital assets. The development coincided with the launch of a private bitcoin mining farm by Waqar Zaka, a long-time crypto enthusiast who has worked to develop the Pakistani crypto industry.

“After years of struggle, I am launching the biggest crypto mining farm in KPK where you all can invest & earn,” Zaka said in a tweet. He thanked Bangash for his legal backing. Replying, Bangash stated that “in future, the help of Waqar Zaka will be sought” in the KP administration’s crypto mining plans.

Profits from bitcoin mining may help prop-up Pakistan’s ailing economy, but KP must first overcome the country’s long-running electricity crisis. Pakistan is facing severe electricity shortages, with power cuts a common occurrence.

Last Saturday, the entire country was thrown into darkness, the Financial Times reports. Authorities blamed the blackouts on a “technical fault” at one of the country’s main power plants in the south. Pakistan only started to restore power in bits on Sunday.

Now BTC mining — the process by which new bitcoins are created using sophisticated, super-computers — is not only an energy-intensive venture but also one that demands consistent power supply. Situated in north-western Pakistan, a mountainous, cool region along the border with Afghanistan, KP might have the best weather for bitcoin mining. But will it have enough energy to sustain a profitable operation?

Riaz Haq said...

China prepares to launch the world’s first official e-currency
Party leaders believe the country’s big tech platforms have too much power

https://www.economist.com/the-world-ahead/2020/11/17/china-prepares-to-launch-the-worlds-first-official-e-currency

THERE IS A good chance that the digital yuan will enter circulation in 2021. It is a debut that will initially make little difference, but could, over time, change the way central banks conduct monetary policy.

The People’s Bank of China has filed more than 100 patent applications for a digital currency and has overseen a range of trials, putting the e-yuan into use in a few cities and on several apps. So far the experiments have gone smoothly, and soon people will have the option of downloading a government-issued digital wallet. Unlike commercial ones such as WeChat Pay and Alipay, the official version will be equivalent to an account at the central bank with the same solidity as hard cash.

For the millions who already use a smartphone instead of a debit card, it will feel like just another payment app. Yet some talk of digital currency as a revolutionary product that could spell trouble for banks as people withdraw money from savings accounts and put it directly into their ultra-safe official e-wallets. What is more, if digital currency were ever to fully replace cash, central banks would, in theory, gain three new powers: to lower interest rates below zero with little difficulty; to issue cash directly to those most in need; and to see more precisely who has money and how it is spent.

In China the central bank is not trying to reinvent monetary policy—at least not yet. Its motivations derive from more immediate challenges. Given the rise of mobile payments, it worries that the big tech platforms have too much power. The digital yuan will offer an alternative. It will also give China a conduit for moving money across its borders without having to rely on swift, a global payments system that comes under American influence. But China’s first objective is much more basic still: to check whether the technology behind the digital yuan works and whether people actually want to use it. Money has been around for some 3,000 years. This update will take time.

Riaz Haq said...

Crypto terror: Pakistan warns of digital currency crime spike

https://www.arabnews.com/node/1803931/world


Police in Pakistan say the use of digital currencies, including bitcoin, for international terror financing, as well as crimes such as extortion and ransom, is on the rise as authorities move to crack down on illegal methods of money transfer.
Bitcoin is the most common virtual currency and is used as a vehicle for moving money around the world quickly and anonymously via the web without the need for third-party verification.
Militant groups worldwide, including Daesh, are increasingly calling on supporters to donate using the digital currency.
Pakistan recently moved to meet 27 targets set for it in 2018 when the South Asian nation was placed on a Financial Action Task Force (FATF) “grey list” of countries with inadequate controls over terror financing. The task force has urged Pakistan to complete an internationally agreed action plan by February 2021. The next virtual plenary of the task force is scheduled for February 22-25.
“We are seeing this trend (of using bitcoin for crimes) since we tightened the noose around illegal systems of transferring funds,” Raja Umar Khattab, head of the Transnational Terrorists Intelligence Group in Sindh’s counterterrorism police, told Arab News.
Last month, Khattab arrested Hafiz Muhammad Omar bin Khalid, a Pakistani engineering student charged with sending bitcoin donations to militants in Syria.
Khalid had transferred over Rs.1 million ($6,200) when he was caught, according to Omar Shahid Hamid, counterterrorism department (CTD) deputy inspector general.
The student had also previously been arrested, and released, in 2018 for extending financial support to an Al-Qaeda militant in Afghanistan, officials said.
In December 2019, Khalid came across a Telegram account online that guided him on how to help the widows of Daesh militants in Syria.
“Help jihadis and their families by sending money through bitcoin,” said one user on the Telegram group, leading Khalid down a rabbit hole of searches into bitcoin wallets. That, in turn, led him to an associate named Zia Shaikh Turk, based in Hyderabad, who converted cash into bitcoin and sent it off to “jihadi brides” in Syria, according to Hamid.
The Pakistani widow of a militant, whom Khalid identified as Umm-e-Bilal, also asked him to open a mobile wallet account, according to interrogation reports made available to Arab News.
“Umm-e-Bilal asked me to open an EasyPaisa (Pakistani digital payment system) account as some of her acquaintances hadn’t heard of bitcoins, but wanted to contribute,” one intelligence report said, quoting Khalid. “I got Rs. 450,000 into my account, added another Rs. 100,000 of my own, converted them into bitcoin and sent them to Syria.”
Last year, a US citizen of Pakistan origin, Zoobia Shahnaz, was sentenced to 13 years’ imprisonment for providing material support to foreign militant organizations, specifically more than $150,000 to Daesh.
Shahnaz, 27, from Long Island, admitted to wiring more than $150,000 to individuals and shell entities that were fronts for Daesh in Pakistan, China and Turkey in 2017. She was engaged in a scheme to scam Chase Bank, TD Bank, American Express and Discover by fraudulently obtaining six credit cards, according to a court filing. She then bought more than $62,703 in bitcoin and other cryptocurrencies, and converted them into cash.
An official at the Federal Investigation Agency (FIA) told Arab News the unit had received numerous complaints in recent months by victims asked to pay ransom and extortion in the form of bitcoin. The official did not go on the record as he was not authorized to discuss the cases with the media.
“Cryptocurrency has been used in international as well as local cases of extortion, kidnapping for ransom, harassment and money laundering as there is no centralized monitoring system,” the official said.

Riaz Haq said...

China looks to take its digital currency global

https://www.axios.com/china-central-bank-digital-currency-global-3268579f-bc4b-4a0e-82d8-004a1cd633e2.html

China appears to have taken another major step in its quest to move the world away from the dollar and position itself as a major power in the world's financial markets.

What happened: China's central bank has set up a partnership with SWIFT, the global system for cross-border payments, through its digital currency research institute and clearing center.

Why it matters: The move has sparked "speculation over the central bank's pursuit of promoting the global use of its digital currency," China's state-operated Global Times wrote on Thursday.

The big picture: China is far ahead of the U.S. in the development of a central bank-backed digital currency and as such could be far ahead in the future of global payments and financial settlement.

If China can cement the yuan as the world's favored digital currency, it could displace the dollar and provide China with the immense global privileges that have been enjoyed by the U.S. since the end of World War II.
Be smart: The lack of financial transactions in and broad use of its currency is the greatest detriment to China amassing global power.

The country has been opening up its financial markets and now has mainland stocks listed on top international exchanges like MSCI and its government bonds have been added to the global benchmark Bloomberg and JPMorgan bond indexes.
In 2020, China drew double the amount of foreign capital to its yuan-denominated government bonds as the year before.
On the other side: The ability of the U.S. to borrow money at will in international debt markets and to impose sanctions on countries it sees as hostile are both largely dependent on the dollar's status as the world's funding currency.

The use of the SWIFT system is a major conduit to imposing sanctions.
Where it stands: Federal Reserve governor Lael Brainard said in a speech in August that the Fed was working to build and test a "hypothetical" central bank digital currency, noting that CBDCs "present opportunities but also risks associated with privacy, illicit activity, and financial stability."

European Central Bank president Christine Lagarde was similarly ambivalent about the development of a CBDC in January, saying it was "going to take a good chunk of time to make sure it's safe," adding, "I would hope that it's no more than five (years)."
China has already rolled out tests of its digital yuan in several Chinese cities, testing payments with real customers in real stores.
Yes, but: Axios China author Bethany Allen-Ebrahimian points out that having the first-mover advantage isn’t necessarily an advantage in implementing digital currencies because technologies are changing so rapidly.

Riaz Haq said...

#America’s Perpetual War. #US doesn’t just bomb its enemies. It chokes them by using US$, the global reserve currency, to enforce its own sanctions to punish them. Search for alternative to US$ is accelerating. It will make #Americans to live beyond means. https://www.nytimes.com/2021/02/15/opinion/us-sanctions.html

"by deluding themselves about the extent of America’s might, they are depleting it. A key source of America’s power is the dollar, which serves as the reserve currency for much of the globe. It’s because so many foreign banks and businesses conduct their international transactions in dollars that America’s secondary sanctions scare them so much. But the more Washington wields the dollar to bully non-Americans into participating in our sieges, the greater their incentive to find an alternative to the dollar. The search for a substitute is already accelerating. And the fewer dollars non-Americans want, the harder Americans will find it to keep living beyond their means."

“It is past time,” Joe Biden pledged last year, “to end the forever wars.” He’s right. But his definition of war is too narrow.

For decades, the United States has supplemented its missile strikes and Special Operations raids with a less visible instrument of coercion and death. America blockades weaker adversaries, choking off their trade with the outside world. It’s the modern equivalent of surrounding a city and trying to starve it into submission. Wonks call this weapon “secondary sanctions.” The more accurate term would be “siege.”

America launched its first post-Cold War siege in 1990, after Saddam Hussein invaded Kuwait. For the next 13 years, Iraq — which before the war had imported roughly 70 percent of its food and medicine — needed United Nations approval to legally import anything. Claiming that everything from water tankers to dental equipment to antibiotics might have military use, Washington used its muscle at the U.N. to radically restrict what Iraq could buy. In her book, “Invisible War,” the Loyola University professor Joy Gordon notes that between 1996 and 2003, Iraq legally imported only $204 per person in goods per year — half of the per capita income of Haiti. After resigning to protest sanctions in 1998, the U.N.’s humanitarian coordinator in Iraq, Denis Halliday, warned, “We are in the process of destroying an entire society.”

The U.N. ended its blockade of Iraq when the United States invaded in 2003. Since then, Washington has often claimed to employ “targeted” sanctions, which restrict arms sales or penalize only specific officials or companies, not entire populations. And in some instances, the sanctions are indeed targeted. But in the case of a few select foes — Iran, Venezuela, North Korea, Cuba and Syria — the United States has initiated or intensified sieges that contribute to the same kind of misery experienced in Iraq.


Riaz Haq said...

OPINION - POLITICS
Op-ed: A digital dollar would help the U.S. and its allies keep China in check
PUBLISHED SAT, FEB 27 20213:03 PM ESTUPDATED SAT, FEB 27 20213:07 PM EST
Frederick Kempe
@FREDKEMPE

https://www.cnbc.com/2021/02/27/op-ed-a-digital-dollar-would-help-the-us-and-its-allies-keep-china-in-check.html

Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell hinted this week that a digital dollar is a high-priority project for the U.S.
China has ramped up efforts for a digital yuan to undermine the dollar and extend its influence.
The benefits for Beijing would be considerable if the U.S. cedes ground in financial technological innovation and the dollar’s global dominance wanes.

Chinese officials have made no secret that their greatly accelerated efforts at introducing and distributing the digital yuan are an opening move in their long-term strategy to undermine the dollar’s global supremacy and expand their influence.

Despite that, leading U.S. financial officials have rolled their eyes at any suggestion that deeper dangers lurk for the dollar, and thus also for U.S. national security, in the global digital currency race. Even as China marches forward and bitcoin’s value reaches $1 trillion, the Federal Reserve had been in no hurry to be a contestant.

Until now.

This week marked a public turning point for the most significant U.S. government officials engaged in international finance — Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell. Josh Lipsky, director of the Atlantic Council’s GeoEconomic Center, tweeted that it marked “the firing of a starting gun.”

At a New York Times event on Monday with Secretary Yellen, CNBC’s Andrew Ross Sorkin prompted her most full-throated endorsement yet of a digital dollar, or Central Bank Digital Currency, or CBDC. Though Sorkin called Yellen’s attention to an Atlantic Council survey with Harvard’s Belfer Center, showing that 70 countries now have digital currency projects, Yellen’s focus instead was on the domestic good a digital dollar could do Americans.

“I think it makes sense for central banks to be looking at it,” said Yellen, in a historic snippet on snapchat.

“I gather that people at the Federal Reserve Bank of Boston are working with researchers at MIT to study the properties of it. We do have a problem with financial inclusion. Too many Americans really don’t have access to easy payment systems and bank accounts. This is something that a digital dollar, a central bank digital currency, could help with. I think it could result in faster, safer and cheaper payments.”

In congressional testimony a day later, Fed Chair Powell also broke new ground, calling the digital dollar “a high priority project for us.” He added, “We are committed to solving the technology problems, and consulting very broadly with the public and very transparently with all interested constituencies whether we should do this.”

Yet while the Fed consults, China executes.

Riaz Haq said...

Pakistan to bring #cryptocurrency out of the dark. Pak has had a boom in trading & mining it. Pak govt has set up a committee to study cryptocurrency #regulation, which includes observers from #FATF, federal ministers & country's #intelligence agencies. https://www.reuters.com/technology/pakistan-moves-bring-cryptocurrency-boom-out-dark-2021-07-16/

Once a week Ghulam Ahmed, 38, takes time out from his cryptocurrency consulting business to log into a WhatsApp group with hundreds of members eager to learn how to mine and trade cryptocurrency in Pakistan.

From housewives looking to earn a side income to wealthy investors wanting to buy cryptomining hardware, many barely understand traditional stock markets but all are eager to cash in.

"When I open the session for questions, there's a flood of messages, and I spend hours answering them, teaching them basic things about cryptocurrency," said Ahmed, 38, who quit his job in 2014, believing it was more profitable to mine Bitcoin.

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"Half the members had no clue what it was and didn't even want to understand it," said committee member Ali Farid Khwaja, a partner at Oxford Frontier Capital and chairman of KASB Securities, a stock brokerage in Karachi. "But the good thing is someone set up this committee. The relevant bodies in the government who need to get things done are supporting it, and the promising thing is nobody wants to stand in the way of technical innovation."

The head of the country's central bank, Reza Baqir, said in April the authority was studying cryptocurrencies and their potential for bringing transactions happening off the books into a regulatory framework. "We hope to be able to make some announcement on that in the coming months," he told CNN. Baqir declined to comment to Reuters on the topic.

Even the education sector has caught on.

In February, one of the country's leading universities, the Lahore University of Management Sciences, received a grant worth $4.1 million to study the technology from Stacks, a blockchain network that connects Bitcoin to apps and smart contracts.

LEGALISATION AND INVESTMENT

These moves can't come soon enough for cryptocurrency advocates.

Institutions have at times treated those involved in the trade of cryptocurrency with suspicion, worried about possible associations with money laundering.

Ahmed said he has been arrested by the Federal Investigation Agency (FIA) and charged with money laundering and electronic fraud twice, though the charges have not held up in court.

On one occasion, he said, the FIA seized a cryptocurrency mining farm he had set up in Shangla, in Pakistan's northern Khyber-Pakhtunkhwa province, which ran on its own hydroelectric power. The FIA did not respond to Reuters' request for comment.

Waqar Zaka, a former TV host with more than a million followers on Youtube, has been lobbying officials for years to not only legalise the industry, but have the government invest in it. Zaka, like Ahmed, had set up a cryptocurrency mining farm running on hydroelectric power.

Now, Khyber-Pakhtunkhwa's provincial government has tapped Zaka and Ahmed to be on a committee studying how it can profit from such ventures. In March, the group announced it was looking into setting up new mining farms using Zaka's facility as a template.


Riaz Haq said...

#Pakistan president calls for National #Blockchain Strategy. Dr. Alvi discusses problems Pakistan faces with #data silos across gov't functions, & supports formation of a National Blockchain Strategy for his country, starting with universities. - CoinGeek https://coingeek.com/pakistan-president-calls-for-national-blockchain-strategy-after-meeting-with-bsv-blockchain-delegation/


Leading the delegation is Founding President of BSV blockchain’s association, Jimmy Nguyen, who will spend a week in Pakistan with the delegation as part of a series of meetings in Islamabad and Karachi with senior government ministers and leaders from private business.

“This week, our Association has had the privilege of bringing a delegation of blockchain experts to Pakistan to learn how BSV can help the country harness the power of the blockchain – for its government agencies, enterprises, start-up ventures and developers,” Nguyen told CoinGeek. “Having attended sit-down meetings with the President of Pakistan Dr. Arif Alvi and the Minister of Science and Technology Mr. Shilbi Faraz on Monday, today’s Pakistan Blockchain Summit is a great chance to meet and hear from the dedicated and highly engaged blockchain community in the country.”


The meeting was broadcast in a news report on Pakistan Television Network PTV, and the president’s official Twitter account also posted a picture of the participants in a series of tweets about the issues discussed.


Dr. Alvi mentioned concerns he has with a lack of data-sharing between government departments, and discussed how blockchain could be used for digital identity and ID management. It could also make these functions more transparent and reduce corruption in both government and business, he said. The president also noted that Pakistani technology talent was driving some of the world’s largest companies, and hoped that local IT startups would continue to attract investment.

Nguyen spoke about how blockchain, and particularly BSV, could be used in various functions across the Pakistani economy, including: banking and payments, fintech, digital advertising, big data management, customs, voting, health care, as well as environmental and governance issues. He also mentioned the work BSV industry representatives are doing with other governments around the world to improve services.

Dr. Alvi stressed that a “systematic and inclusive approach” was required to transition his country’s data management to the blockchain, which included building awareness of what the technology could do and how business and government could use it to their benefit.

He also called for more training and development in other “fourth industrial revolution” technologies such as artificial intelligence and cyber security. Nguyen said his organization was willing to assist in training employees at all levels of government and the public service.

BSV blockchain’s associaiton has led a drive into South Asia, the Middle-East and Africa, meeting with several government and business representatives across the wide and populous regions. Reflecting the potential for growth in this part of the world, the association has launched a BSV Hub in Dubai led by Muhammad Salman Anjum of InvoiceMate to educate and form partnerships with business and other institutions that could benefit from BSV blockchain technology. There is also an ongoing pilot program with the government of Tuvalu that could see several government and banking functions go completely digital.

With its unbounded capacity for processing and storing massive amounts of data securely, BSV would be the most logical blockchain to choose for any organization looking to incorporate blockchain technology. BSV, using Bitcoin’s original technology and permanent protocol rules, is capable of replicating the functions of today’s internet, but in a way that timestamps and logs all information as it changes, as well as allowing users to “own” and control levels of access to their data.

Riaz Haq said...

E-banking transactions exceed GDP

https://tribune.com.pk/story/2343698/e-banking-transactions-exceed-gdp


Speaking at the launch of Raast Person-to-Person (P2P) Instant Payments System on Tuesday, the central bank governor said that e-banking transactions were considerably more than the country’s total gross domestic product (GDP), which currently stood at $370 billion.

“If the figure is $500 billion now, you can imagine the pace at which we are digitising,” he remarked, adding that those transactions showed a year-on-year growth of 30.6% in volume and 31.1% in value.

Baqir said that there were around 190 million mobile phone subscribers in the country whereas only 80 million people had bank accounts, meaning that there were over 100 million people who had mobile phones but they did not own a bank account.

“Therefore, there is a huge potential for enhancing financial inclusion,” he said and expressed hope that the Raast initiative would help bridge the gap.

The SBP governor pointed out that Raast was different from other programmes as it facilitated free-of-charge transactions within seconds. He was hopeful that people would take benefit of the revolutionary system.

The State Bank has taken many initiatives for ramping up the pace of digitisation. In this regard, the installation of Point of Sales (POS) machines has shown a growth of 50% and it is expected to rise further at a rapid pace.

In collaboration with the National Database and Registration Authority (NADRA), the SBP will also facilitate people in undergoing biometric verification remotely for opening bank accounts.

The new banking system will be established in line with the Roshan Digital Account that has been introduced for overseas Pakistanis.

“Individuals can use Raast platform in their daily transactions similar to cash and they will not have to pay any fees or charges for using this payment system,” Baqir said. “It is secure, convenient and free of risks compared to cash.”

Riaz Haq said...

U.S. Lawmakers Look to Digital Dollar to Compete With China
The Federal Reserve is considering the idea, but in no rush to join a digital-assets space race

https://www.wsj.com/articles/u-s-lawmakers-look-to-digital-dollar-to-compete-with-china-11659925037?mod=Searchresults_pos4&page=1

Lawmakers are pushing the Federal Reserve to move swiftly toward issuing a digital dollar, to combat steps from China and others they say could one day threaten the U.S. status as the global reserve currency.

The bipartisan group of lawmakers, including Reps. Maxine Waters (D., Calif.) and French Hill (R., Ark.), has sought for the U.S. to counter global competitors launching digital versions of their currencies. The House Financial Services Committee, which both serve on, might vote on related legislation as soon as next month.

Ms. Waters has framed competition over new forms of central-bank money as “a new digital assets space race.” The Biden administration and the Fed don’t share a sense of urgency.

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Fed Chairman Jerome Powell has indicated the central bank isn’t in a rush, as it confronts inflation and a slowing economy. Mr. Powell has said it is more important to get the digital dollar right than to be first to market, in part because of the dollar’s critical global role. He has also said the Fed won’t issue a digital dollar without support from elected officials. The White House has largely remained neutral on a digital dollar, with President Biden ordering a study to determine its implications for issues such as economic growth and stability.

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Some in Congress say the U.S. is already behind the curve. Among the Group of 20 major economies, 16 are in the development or pilot phase of a digital currency, according to the Atlantic Council, a Washington think tank. The European Central Bank, on behalf of countries including Germany and France, is exploring designs for a digital euro and preparing to launch a test pilot.

Mr. Hill, the Arkansas Republican, said his concerns were animated in part by China, which began real-world testing of its own central-bank–issued digital currency in 2020. In an interview, he said China’s lending practices in the developing world could make it easier for the country to promote international uses of its digital currency—a potential threat to the dollar-based global economy.

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“We should be concerned about China’s predatory practices,” he said.

Chinese authorities haven’t ruled out international use of the e-CNY, the official name for the country’s digital currency, but say it is designed for small-scale domestic use by consumers.

Analysts are looking for signs that the People’s Bank of China will take concrete steps to join with central banks elsewhere to make it possible to use digital currencies between countries. The bottom line is that Beijing is uncomfortable with the outsize role the U.S. dollar plays in global commerce and in particular fears being frozen out of the dollar-based financial system, such as in response to a conflict over Taiwan.

International transactions in a digitized currency created by China, the thinking goes, could be a defensive weapon in such circumstances because they would happen beyond the reach of the U.S.

Riaz Haq said...

Pakistan launches new laws to expedite CBDC launch by 2025
The State Bank of Pakistan signed in new laws for Electronic Money Institutions — non-bank entities offering digital payment instruments — to ensure the timely issuance of a CBDC in the next three years.

https://cointelegraph.com/news/pakistan-launches-new-laws-to-expedite-cbdc-launch-by-2025

Regulators worldwide see central bank digital currencies (CBDCs) as a way to enhance fiat capabilities by inheriting the financial prowess of technologies that power cryptocurrencies. Pakistan joined this list by announcing new regulations to ensure the launch of an in-house CBDC by 2025.

The State Bank of Pakistan (SBP) signed in new laws for Electronic Money Institutions (EMIs) — non-bank entities offering digital payment instruments — to ensure the timely issuance of a CBDC in the next three years. The World Bank helped Pakistan design the new regulations, according to local media Arab News.

In addition to timeline adherence for the CBDC launch, the regulations warrant preventive measures against money laundering and terror financing while considering consumer protection and reporting requirements.

The state bank, SBP, will issue licenses to EMIs for CBDC issuance. During the announcement, Finance Minister Asad Umar stated that using EMIs in promoting the digital economy will safeguard financial institutions from cybersecurity threats. Deputy Governor of SBP Jameel Ahmad envisions curbing fiat-induced corruption and inefficiency through CBDCs. He said:

The commencement of a speedy regulatory environment places Pakistan among the nearly 100 countries that are actively involved in researching and launching CBDC initiatives.

Neighboring country India also recently joined the race to launch a home-grown CBDC. On Nov. 22, The Reserve Bank of India (RBI) announced an ambitious plan to launch a retail CBDC pilot by the end of 2022.

Indian central bank, RBI, is reportedly in the final stage of preparing the retail digital rupee pilot rollout, which will be initially tested among 10,000 to 50,000 users of participating banks.

Riaz Haq said...

Pakistan approves blockchain-based national eKYC banking platform

https://www.kitco.com/news/2023-03-06/Iran-advances-its-digital-rial-pilot-and-Pakistan-looks-to-create-an-eKYC-banking-platform.html

In other crypto-related developments out of the MENA region, the Pakistan Banks’ Association (PBA) has signed off on the development of a blockchain-based Know Your Customer (KYC) platform with the goal of strengthening the country’s Anti-Money Laundering (AML) capabilities in a bid to counter the financing of terrorism.

According to a report from the Daily Times, the PBA, which is comprised of 31 traditional banks operating in Pakistan, signed off on the project to develop Pakistan’s first blockchain-based national eKYC banking platform on Thursday at the behest of the State Bank of Pakistan (SBP), the country’s central bank.

Included in the list of member banks are multiple international behemoths such as the Industrial and Commercial Bank of China, Citibank and Deutsche Bank.

The new blockchain-based eKYC platform – dubbed “Consonance” – will also reportedly improve operational efficiencies, which are primarily aimed at improving customer experience during onboarding.

Consonance will be developed by the Avanza Group, and the platform will be used by member banks to standardize and exchange customer data via a decentralized and self-regulated network.

Riaz Haq said...

Unregulated and forbidden, crypto still thrives in Pakistan

https://tribune.com.pk/story/2349633/unregulated-and-forbidden-crypto-still-thrives-in-pakistan

Bitcoin and cryptocurrency mining were flourishing in Pakistan until April 2018 when the government banned trading and mining the virtual currencies. There is still a growing mining industry despite the fact that many mining farms have been shut down since this ban was implemented. Bitcoin mining pools like ViaBTC, Braiins and Slush Pool saw an increase in the number of people mining bitcoin and other crypto currencies at home as a result of the ban. The cryptocurrency market is highly volatile, and because of its high volatility, we’ve seen a lot of hesitation from businesses, regulators, and consumers in embracing the asset. There’s no doubt that crypto currencies are a highly risky asset class, which is why more and more exchanges are thriving in countries with least favorable circumstances.

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Pakistan is one of the fastest-growing economies with a youth bulge of 65 per cent, rapid technology adaptation, and a government trying to enable a business-friendly legislative framework. The latest data from Sensor Tower shows that Binance, KuCoin, Crypto Blockfolio, OKeX, and are the top cryptocurrency exchanges in Pakistan, among Android and iOS users. These exchanges haven’t taken any proactive measures to capitalise on this huge opportunity presented by the sixth most populous country with the third-highest global crypto adoption. Most exchanges operate either through ghost partners without any regulatory effort. As many as a thousand Pakistani traders are listed on cryptocurrency exchanges based outside of Pakistan. Localbitcoins.com is one of the leading platform on crypto exchanges, which facilitates a bulk of Pakistanis.

Bitcoin and cryptocurrency mining were flourishing in Pakistan until April 2018 when the government banned trading and mining the virtual currencies. There is still a growing mining industry despite the fact that many mining farms have been shut down since this ban was implemented. Bitcoin mining pools like ViaBTC, Braiins and Slush Pool saw an increase in the number of people mining bitcoin and other crypto currencies at home as a result of the ban. The cryptocurrency market is highly volatile, and because of its high volatility, we’ve seen a lot of hesitation from businesses, regulators, and consumers in embracing the asset. There’s no doubt that crypto currencies are a highly risky asset class, which is why more and more exchanges are thriving in countries with least favorable circumstances.

The adoption of cryptocurrencies has begun to gain traction in the country. For the first time, Pakistan has been ranked third on Chainalysis' 2021 Global Crypto Adoption Index. Plans for cryptocurrency mining farms were announced earlier this year by Khyber Pakhtunkhwa province. A committee has been set up at the federal level to look into the regulation of crypto-currencies. These are encouraging signs. However, there is still much to be done, and there is only a brief window of opportunity to do so.

Crypto currencies regulations in Pakistan

DeFi (Decentralized Finance)is transforming industries and job roles, opening up new markets for businesses to tap into. DeFi will continue to face obstacles in the form of legal, logistical, and regulatory obstacles to overcome. Block chain technology closes the gaps in security, transparency, authentication, and automation that currently exist in our current systems. Despite the fact that it is still speculative, cryptocurrency is a thriving financial industry in South Asia; especially in India, following the same steps by Pakistan.

Riaz Haq said...

33% of #Pakistani #crypto investors use it as hedge against #rupee fall. Its demographics reveal 66% of crypto investors are male, with Gen Y (aged 26-39) being the largest age group of investors (47%), followed by Gen Z (aged 18-25) with a share of 35%. https://www.dawn.com/news/1757448

One in every 10 crypto investors in Pakistan prefers to receive or pay salaries in virtual currency, according to a survey conducted by KuCoin, a global cryptocurrency exchange.

Titled “Into the cryptoverse: understanding Pakistani crypto investors 2023,” the survey results released on Thursday showed there’s growing adoption and interest in digital assets in Pakistan — a potentially large market based on the Global Crypto Adoption Index by Chainalysis that ranked the country sixth in 2022.

Pakistani crypto investors are driven by diverse motivations like future aspirations (69 per cent), wealth accumulation (44pc), convenience (49pc) and value storage against currency depreciation (33pc).

The survey sheds light on different use cases for cryptocurrencies in Pakistan, with trading (46pc) being the most common. It was followed by HODLing (30pc), a practice that involves purchasing and holding cryptocurrency while refusing to sell it despite swings in price.

Other use cases include peer-to-peer money transfers (29pc) and buying non-fungible tokens (22pc), which are digital assets that are recorded on a blockchain and can only be transferred by the owner.

“This indicates the potential for mainstream adoption and the diverse ways in which crypto assets are being utilised in the country,” according to the commentary by KuCoin on the survey that was conducted by a third party on its behalf. The survey was conducted from May 5 to May 12 using SurveyMonkey Audience and involved 500 adult crypto investors.

Its demographics reveal that 66pc of crypto investors are male, with Gen Y (aged 26-39) being the largest age group of investors (47pc), followed by Gen Z (aged 18-25) with a share of 35pc.

The majority of crypto investors (66pc) have an annual household income of less than Rs5 million. Additionally, 30pc of new investors have begun investing in crypto within the past three months. “This suggests that as crypto adoption grows, a significant portion of crypto investors in Pakistan come from households with moderate to lower income levels, highlighting the accessibility and appeal of cryptos to a diverse range of income groups,” it noted.

A significant portion (40pc) of crypto investors in Pakistan have invested less than Rs30,000 or $100, the survey showed. “This is particularly evident among Gen Z (48pc) [as] it implies that a large number of investors, especially the younger generations, are starting with smaller investments, potentially due to limited financial resources or a cautious approach towards cryptocurrency,” it said.

The State Bank of Pakistan doesn’t recognise crypto assets, which are digital currencies in which transactions are verified and recorded by a decentralised system. Yet rough estimates by stakeholders suggest the annual trading volume of these digital assets in the country is somewhere between $18 billion to $25bn.