Pakistan’s Debate on Cryptocurrency Legalization Intensifies Amid Growing Public Interest

In Pakistan, news surrounding digital currencies and cryptocurrencies frequently resurfaces, as many countries around the world have already begun integrating them into their financial systems. A significant portion of Pakistan’s population also shows strong interest in cryptocurrencies like Bitcoin, making such news a recurring topic.

Recently, rumors have spread suggesting that the Pakistani government is considering granting legal status to cryptocurrencies. According to reports, the State Bank of Pakistan (SBP) has even prepared a comprehensive framework to introduce the country’s own digital currency, pending approval. However, when contacted for clarification, an SBP spokesperson, Khabeeb Usmani, denied any such developments, stating that the bank had not issued any such messages. He emphasized that if there were any official progress regarding digital currency, it would be announced on SBP’s official website.

**SBP’s Stance Remains Unchanged**

Usmani also reaffirmed the SBP’s stance of not legalizing digital currencies, advising all financial institutions to avoid transactions involving cryptocurrencies. Despite this, there is a growing public interest in crypto investments in Pakistan. A report by the Federation of Pakistan Chambers of Commerce and Industry in December 2021 revealed that Pakistan had registered a record cryptocurrency transaction volume of around $20 billion, surpassing the country’s federal reserves.

Pakistan ranks third in the world after India and Vietnam in terms of cryptocurrency adoption, according to the 2020-21 index. Globally, the popularity of cryptocurrencies is rising rapidly, with even newly elected U.S. President Donald Trump launching his own cryptocurrency, which quickly gained a market capitalization worth billions.

**What Is the Future of Cryptocurrencies in Pakistan?**

Economic expert Farukh Saleem highlighted that the world is rapidly embracing cryptocurrencies, which operate on blockchain technology. He emphasized that Pakistan must adapt to these new innovations to remain in step with global financial trends. According to Saleem, digital currencies like EasyPaisa, JazzCash, and other mobile apps are already a form of digital money being used in the country. He criticized the SBP and the government for being slow to recognize these changes, warning that without timely action, Pakistan could fall behind the rest of the world in terms of financial innovation.

**Cryptocurrency Adoption: A Global Trend**

Journalist Mahtab Haider, who closely follows economic matters, pointed out that while the SBP has yet to grant official approval for cryptocurrencies, the matter is still under review. He noted that around a year ago, the IMF’s technical mission to Pakistan recommended that the government officially recognize cryptocurrencies as a valid form of currency and bring them under the tax net.

Haider suggested that the SBP should make a clear decision on the matter, as delays may harm investors, particularly those looking to invest in or withdraw cryptocurrency holdings.

**Concerns and Controversies Surrounding Cryptocurrencies**

There are diverse opinions on cryptocurrencies within Pakistan. Raja Kamran, an economic expert, pointed out that the SBP’s refusal to acknowledge cryptocurrencies stems from the lack of clarity regarding their regulatory framework. He mentioned that cryptocurrencies are not backed by any country or state, making them a speculative asset that could raise numerous legal and financial questions.

Kamran also raised concerns about the environmental impact of cryptocurrency mining, which consumes large amounts of electricity. He cited China’s ban on cryptocurrency mining companies due to energy shortages as an example. Furthermore, he questioned the legitimacy of cryptocurrencies, arguing that they are not used for direct purchases but rather for trading and speculation.

**Islamic Perspective on Cryptocurrencies**

Raja Kamran also touched on the Islamic perspective, which prohibits trading in currency for profit, known as “riba.” He suggested that cryptocurrencies may not align with Islamic principles, as people are largely engaged in speculative trading rather than using cryptocurrencies as a medium of exchange.

In conclusion, while cryptocurrency continues to gain global traction, its future in Pakistan remains uncertain. The SBP’s reluctance to legalize it, combined with ongoing debates surrounding its regulatory, environmental, and ethical implications, has left the matter unresolved. The need for clear, timely decisions on digital currencies remains critical to the country’s financial landscape.