Pakistan, one of the top 10 countries receiving money from overseas workers, could use blockchain technology to make the process faster and cheaper, according to Bilal bin Saqib, chief adviser to the finance minister and a member of the Pakistan Crypto Council (PCC).
In an interview with CoinDesk, Saqib shared that Pakistanis living abroad sent over $31 billion home in 2023-24. However, traditional money transfer methods can be slow and costly, with fees exceeding 5%.
These remittances, which are money or goods sent by migrants to their home country, are crucial for many nations. They provide financial support during tough times and can help drive long-term economic growth.
“The PCC will investigate blockchain-based remittance solutions to reduce costs and delays,” he said. “Additionally, we’ll invest in blockchain education, upskilling programs, and Web3 development to cultivate talent, boost employment, and drive economic growth.”
Blockchain technology can make overseas money transfers cheaper by cutting out middlemen like correspondent banks, according to the OECD in 2020.
However, Pakistan has banned cryptocurrency and stablecoin trading since 2018, with the State Bank of Pakistan (SBP) stopping financial institutions from handling crypto transactions.
Despite this, Pakistan is among five Asian countries listed in Chainalysis’ 2024 Global Crypto Adoption Index. Many people there use digital assets to protect their money from inflation and currency fluctuations.
“This reflects significant demand despite the regulatory vacuum. With over 60% of Pakistan’s 240 million people under 30, our tech-savvy youth are poised to drive blockchain and Web3 innovation,” Saqib said. “The PCC aims to unlock this untapped potential by advocating for a clear, progressive regulatory framework.”
The PCC is working on projects like turning real-world assets into digital tokens and creating controlled testing environments for regulations. At the same time, it is following the rules set by the Financial Action Task Force (FATF), which took Pakistan off its gray list in 2022.
“Illegal crypto outflows are a concern,” he said “Without regulation, cryptocurrencies can facilitate untracked cross-border transactions, exacerbating dollar shortages. The PCC’s first step is to establish a robust, transparent regulatory framework mandating know-your-customer (KYC) and anti-money laundering (AML) compliance for all crypto activities.”
Last week, Trump announced a plan to create a bitcoin reserve using BTC and other cryptocurrencies seized by authorities. Saqib was unsure if this approach would work for Pakistan.
“While building a BTC reserve from seized assets could be appealing, Pakistan’s crypto enforcement is nascent, and illicit holdings are rarely intercepted at scale. Any move toward a strategic reserve would require careful dialogue with the IMF and FATF to avoid jeopardizing international support or Pakistan’s post-gray-list status,” Saqib said.
source: coindesk.
