Tuesday, October 14, 2014

Karachi Entrepreneurs Launch Urdubit Bitcoin Exchange in Pakistan


"We plan to create a platform (Urdubit Bitcoin Exchange) where people feel safe with the world of Bitcoin and hopefully substitute it for trading locally as easily as Pakistani rupees, while giving everyone an opportunity to invest in this commodity." Zain Tariq, Urdubit, Pakistan


Zain Tariq and Danyal Manzar have launched Pakistan's first Bitcoin exchange called Urdudit, according to media reports.

It represents an attempt to introduce Pakistanis to the  digital currency and bring them into the wider Bitcoin community.



As a virtual currency, Bitcoin is created and stored electronically on a computer or mobile device.  There are over a hundred digital currencies in use today but Bitcoin is by far the most popular one and accounts for more than two-thirds of the virtual currency market.

Satoshi Nakamoto, a computer programmer, proposed Bitcoin, which was an electronic payment system based on mathematical proof. The idea was to produce a currency independent of any central authority, transferable electronically, more or less instantly, with extremely low transaction fees.

Unlike national currencies, no one controls Bitcoin. Bitcoins aren’t printed, like dollars or euros – they’re produced by lots of people running computers all around the world, using software that solves mathematical problems. It’s a growing category of money known as cryptocurrency.

Urdubit exchange's main focus is on bringing liquidity to the Pakistani Bitcoin market, and educate the people on the use of the cryptocurrency as a commodity. To accelerate these processes, Tariq and Manzar built a Bitcoin community and advocacy group called BitcoinPk. According to Tariq, Pakistan's Bitcoin community is still small, although active, and rather dispersed.

There's a lot of activity around Bitcoin in Silicon Valley. A number of entrepreneurs, including Pakistanis, are pursuing opportunities offered by digital currencies. One such Silicon Valley Pakistani entrepreneur is Haseeb Awan, co-founder of BitAccess, who is developing Bitcoin ATM machines.

Bitcoin is attracting the attention of law enforcement agencies, tax authorities, and various government regulators, all of whom are trying to understand how the cryptocurrency fits into existing frameworks. US law-enforcement and securities agencies have said at a recent Senate hearing that digital currencies could be legitimate means of exchange, spurring more investments by venture capitalists.

Bitcoin Price Oct 7 2012 to Oct 15 2014 Source: CoinDesk


The legality of your Bitcoin activities will depend on who you are, where you live, and what you are doing with it, according to Coindesk. Bitcoin has proven to be a contentious issue for regulators and law enforcers, both of which have targeted the digital currency in an attempt to control its use. It's still early in the game, and many legal authorities are still struggling to understand the cryptocurrency, let alone legislate around it. It's another case of legislation significantly lagging technology.  In the end, the currency's future will depend on how many consumers and businesses adopt it and eventual recognition of such transactions by various national governments around the world.

Here's a video explaining Bitcoin mining in Urdu:

http://vimeo.com/84558750


CPU MINING Urdu Tutorial from Dablio Raja on Vimeo.

Related Links:

Haq's Musings

Financial Services in Pakistan

Mobile Banking in Pakistan

Pakistan Among Most Popular Outsourcing Destination

Microfinance in Pakistan

Pakistanis in Silicon Valley




13 comments:

Monis R. said...

Unfortunately, I can't imagine that the State Bank of Pakistan would let this fly.

Riaz Haq said...

Monis: "Unfortunately, I can't imagine that the State Bank of Pakistan would let this fly."


SBP will most probably follow the US lead which will involve some govt regulation against use in illicit trade.

Monis R. said...

SBP's regulatory oversight has traditionally been far tighter than the US. I'm sitting at the center of several epayment initiatives and the current framework will render bitcoin illegal under "branchless banking" regulations.

Riaz Haq said...

Monis: "SBP's regulatory oversight has traditionally been far tighter than the US. I'm sitting at the center of several epayment initiatives and the current framework will render bitcoin illegal under "branchless banking" regulations."


I guess it's time to start fighting SBP by creating an advocacy group

Mozzam said...

Riaz: Who are Tariq and manzar?
Did they start from here or from Pakistan? This is a great idea.

Anonymous said...

Lets not think of this as a currency for a min. Think of it as a commodity isnt that what is meant to be listed on NASDAQ? Now think of the possibilities. Currently only UBL allows online credit card merchant processing with very difficult regulations and requirements for high net-worth transactions. What do people do to sell their products online? A big chunk of people can get freelancing jobs with the capability of getting paid without expensive credit card acceptance restrictions. Now think of the trade imbalance and Pakistans biggest trade partner who also generates the biggest investment of bitcoin. I will leave you with 3 sites for more information on bitcoin in pakistan.
https://www.urdubit.com The bitcoin Exchange
http://bitcoin.com.pk bitcoin history and how to mine it yourself with your pc. Run by Danyal
http://www.bitcoinpk.com Run by Zain

Riaz Haq said...

With the global mobile applications (apps) market expected to be worth $25 billion by 2015 — according to a report published by MarketsandMarkets, a global market research and consulting company — everyone, from independent developers and software houses to telecommunication (telecoms) giants, is hard at work to secure their share of the fully-baked pie.
Amid growing demand and increasing competition, many are chasing high-margin outsourcing contracts in developing countries such Pakistan. With an abundance of skilled but cheap labour to offer, the country is rapidly emerging as one of the leading IT outsourcing destinations of the world.
Although mobile apps have been around since the late 90s, the increasing penetration of smartphones in the country — nearly seven to eight million smartphones according to a recent research conducted by a local telecom for its marketing strategy — has made their presence felt more deeply. “The number of smartphones has exceeded the number of computers in the country and this change has come about in the past five years,” says Asad Memon, director operations at Creative Chaos, a high-end custom software development company in Karachi with over 14 years of experience.
It is also the burgeoning utility of smartphones — surpassing that of laptops — which has accounted for the explosive growth of mobile apps. For example, the smartphone’s additional features, such as the orientation sensor (built-in compass) and cell phone triangulation (which collects data to trace the approximate location of a cell phone), assist most apps, including Google maps, to do ingenious things. “The utility of these apps has started making a lot of sense to people,” he highlights, adding that even niche brands have capitalised on the feature to directly reach out to target audiences by advertising through mobile apps. As a result, it has attracted more developers into the technology ecosystem to meet the growing demand.

Asad Memon, director operations at Creative Chaos, traces the trajectory of the mobile apps industry. PHOTO: ARIF SOOMRO
A popular outsourcing destination
When it comes to the global market, Pakistan plays its part as a mobile app developer. “Gora sochta hai, desi karta hai,” says Memon, summarising how foreign clients conceptualise the app and leave Pakistani developers to simply follow directions. Since the average rate charged by an iPhone app developer in the US ranges between $50 and $60 per hour, or more, depending on the brand and the complexity of the app, a cheaper solution is to outsource it to countries that quote the lowest price. Despite India being a much cheaper alternative, their issues with quality-control make Pakistan the next best alternative. “What sets Pakistan apart is the costing and the relationship of trust that has been established by delivering quality apps on time, depending on the company [developing the app],” says Memon. A basic app developed by a local software house can cost anywhere between Rs400,000 to Rs10 million, while the more sophisticated ones can go up to Rs20 million, depending on the company’s profile. Time difference is an additional advantage for Pakistan. “By the time we wake up, we are ready to incorporate changes based on the feedback we get,” he says. In certain cases, a team of 140 developers is dedicated to look after a single foreign client.

http://tribune.com.pk/story/786759/mobile-applications-a-test-of-apptitude/

Riaz Haq said...

#Urdu version of Whatsapp soon to be launched in #Pakistan http://en.dailypakistan.com.pk/technology/urdu-version-of-whatsapp-soon-to-be-launched/#.VbZt6vE8OvA.twitter

Whatsapp for androids has been fully translated into Urdu and will soon be launched in Pakistan.

This milestone is achieved by Ahsan Saeed who works as a Translation Administrator for WhatsApp, the Tech Juice reported.

Ahsan, along with his team of hardworking volunteers, translated 753 strings and moderated 2089 strings in less than three months.

With this achievement, Urdu has become the 18th language that Whatsapp has been officially translated to.

After the announcement of translation of all government websites into Urdu, the Urdu version of Whatsapp targets a wider local audience.

With the increased usage of 3G/4G mobile internet and smartphones, a huge chunk of population will be able to get the advantage of the messaging which failed to do so otherwise due to the language barrier.

Riaz Haq said...

Sounds Familiar: #Pakistan #Bitcoin Surges While Gov’t Crushes #Cash. #Demonitization #India https://cointelegraph.com/news/sounds-familiar-pakistan-bitcoin-surges-while-govt-crushes-cash … via @Cointelegraph

In the week the country’s Senate advised the scrapping of its highest value banknote, Pakistan’s Bitcoin trading volume has shot up almost 400%.

The Senate resolution, which was adopted even though the Pakistani government opposes it, would see the 5000 rupee note removed “to reduce illicit money flow.”

Cash war copycat

Multiple news agencies report that Pakistan is aiming to counteract illegal activities conducted with cash and that the move could be a copycat of India’s rupee removals in November.

Reuters reports a Senate angle that has fewer high-value notes “would encourage the use of bank accounts and reduce the size of the undocumented economy.”

Ironically, India has previously indicated one of the reasons behind its moves to replace cash in its economy was to curb money forgery originating in Pakistan.

As its replacement notes came into circulation, the Indian press reported them already being recovered from “terrorists” in Kashmir.

According to the Senate, however, Pakistan’s reforms would be in a different style to those over the border. Notes would be decommissioned not within a matter of days, but years.

Pakistani FinTech lies in wait

Nonetheless, the announcement appears to have added fuel to an already expanding Bitcoin exchange market suddenly exploding with new interest. Unlike India, though, the Bitcoin economy of Pakistan still leaves something to be desired in terms of facilities.

Local Bitcoin exchange Urdubit recently took part in a workshop specifically aimed at cracking customer penetration for startups offering digital economy-related technologies.

“Despite the high potential, a majority of Pakistani SMEs are yet to adopt e-commerce or are sub-optimally engaged,” a press release on the event last month stated.

Organizer Ali Sarfraz Hussain added that “although Pakistan is a latecomer to this sector, e-commerce is rising massively and e-commerce players are mushrooming in the country.”

Pakistan is just the latest economy to toy enter the war on cash. India is not alone, Venezuela and Australia have already launched or are considering their own cash reforms.

Riaz Haq said...

#Tax Authorities In #Pakistan Zero In At #Bitcoin Traders. #FBR #SBP https://cointelegraph.com/news/tax-authorities-in-pakistan-zero-in-at-bitcoin-traders … via @Cointelegraph

Tax authorities across the globe have set their sights on Bitcoin traders. The latest to join the set is the FBR (Federal Board of Revenue) in Pakistan.

Bitcoin in Pakistan
While Asian countries like Japan, China and South Korea have been in the news for people taking a fancy to Bitcoin, adoption in Pakistan has been low key.

The first Bitcoin exchange in Pakistan, Urdubit, was established in 2014. There is tremendous potential for Bitcoin in Pakistan, with the country receiving remittances of $20 bln every year. Pakistan also has a vibrant freelance economy, with estimated revenue of $1 bln.

Wider adoption of Bitcoin can bring efficiencies in both remittances and payment for online freelancing.

Windfall profits
The recent rapid increase in Bitcoin price has meant that Bitcoin investors were able to reap windfall profits. Not all of them declare this income, resulting in scrutiny from tax authorities.

In the US, the IRS served a John Doe summons to Coinbase, asking it to hand over details of US customer transactions. The IRS had sought details of customer transactions between 2013 to 2015, much before the current bull rally.

In Pakistan, the volume of Bitcoin transactions has recently increased, leading to the intelligence department of the FBR launching an investigation.

The objectives of the FBR are two-fold – detect cases of tax evasion as well as money laundering. According to tax officials, major traders of Bitcoin have not reported their business profits to tax authorities and hence a summons has been issued.

Cracking down
The State Bank of Pakistan does not recognize cryptocurrencies, including Bitcoin. Cryptocurrencies are traded as commodities and the government has not shown any indication that it would either regulate or impede cryptocurrency transactions.

The focus of the current government action seems to be restricted to cracking down on cases of money laundering and tax evasion. The government will find it tough to restrict its people from purchasing a deflationary currency when the average rate of inflation in Pakistan during the last 60 years is 7.8 percent.

Riaz Haq said...

#Pakistan’s Central Bank Aims to Issue Its Own #digitalcurrency by 2025, says an announcement made during a ceremony to launch of Electronic Money Institutions (EMIs) on Monday, April 1, 2019. #payments https://cointelegraph.com/news/pakistans-central-bank-aims-to-issue-its-own-digital-currency-by-2025 via @cointelegraph

Jameel Ahmad, the deputy governor of the State Bank of Pakistan (SBP), the nation’s central bank, declared that the institution aims to issue a digital currency by 2025, Pakistani YouTube news channel Public News reported on April 1.

English-language local media Dawn also reported today that Asad Umar, Pakistan’s finance minister, prompted the official’s statement during a ceremony celebrating the launch of Electronic Money Institutions (EMIs) on Monday, April 1.

According to Dawn, the minister asked the federal investigation agency and the central bank to ensure that the new system will feature cybersecurity. Umar purportedly claimed that a single high profile incident could irreparably damage trust in the banking system.

As part of his response, the central bank’s deputy governor, Ahmad, then declared that the institution is already working on releasing its central bank digital currency (CBDC) concept by 2025. According to the official, the aim is to promote financial inclusion and efficiency and combat corruption. The complete deployment of the CBDC, however, is set to happen by 2030.

As previously reported, Pakistan is implementing new cryptocurrency regulations in an effort to improve its track record fighting financial crime.

As Cointelegraph reported in February, Ukraine’s central bank has completed a pilot scheme for its own national digital currency, the e-hryvnia.

During the same month, the Oxford Business Law Blog published a research report conducted by a postdoctoral researcher from the University of Luxembourg noting that the idea of issuing a CBDC is too attractive to ignore.

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...

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.