Debt-ridden Pakistan plans to legalize crypto to boost revenue
What's the story
Pakistan is moving closer to legalizing cryptocurrency trading, newly appointed Pakistan Crypto Council CEO Bilal bin Saqib said.
Speaking to Bloomberg TV, Saqib disclosed that the cash-strapped country intends to create a regulatory framework for the same.
The main goal is to draw international investment and incorporate blockchain technology into its economy.
Policy change
Pakistan central bank's stance shifts amid growing crypto adoption
Despite earlier warnings from Pakistan's central bank against cryptocurrency over fears of fraud, money laundering, and financial instability, the demand for digital assets has become too big to ignore.
Saqib noted that an estimated 15-20 million Pakistanis are already trading digital assets.
This increasing local adoption and global trends leaning toward crypto-friendly policies in countries like US and UAE led Pakistan to move toward legalizing cryptocurrency trading.
Growth prospects
Economic growth potential drives crypto legalization
The prospect of economic growth is one of the major reasons why Pakistan has decided to regulate the cryptocurrency sector.
A regulated crypto market could bring in foreign investment and promote technological innovation.
The impact of global politics has prompted many countries including Pakistan to rethink their position on digital assets.
Financial implications
IMF loans and potential tax revenue from crypto trading
Pakistan has taken over 20 loans from the International Monetary Fund (IMF) since 1958, the latest being a $7 billion loan approved in September 2024.
The country is the fifth-largest IMF debtor and had assured this would be their last loan.
By regulating crypto trading, Pakistan could generate tax revenue from capital gains and trading activity, reducing fiscal deficits and dependence on external borrowing.
Regulatory framework
Pakistan Crypto Council to draft crypto regulations
The IMF has proposed that the Pakistan Federal Board of Revenue include crypto gains in the country's tax net to pay off bailout debts.
Last week, Islamabad formed the Pakistan Crypto Council (PCC) to draft crypto regulations and ensure compliance with international standards.
The council is headed by Finance Minister Muhammad Aurangzeb and includes the governor of State Bank of Pakistan, chairman of SECP, and federal IT secretary and federal law secretary.