Pakistan, one of the largest remittance-receiving countries in the world, is considering using blockchain technology to revolutionize the process of transferring money from abroad. According to Bilal bin Saqib, senior advisor to the Finance Minister and member of the newly established Pakistan Cryptocurrency Council (PCC), blockchain could be the key to reducing costs and speeding up transactions. Could this move help Pakistan tap into the enormous economic potential from its overseas labor community?
Remittances: The Lifeblood of the Economy and Major Challenges
In the fiscal year 2023-24, overseas Pakistanis sent back over $31 billion through traditional channels like banks and remittance services. This is an important resource, not only supporting families but also acting as a buffer during economic crises and driving sustainable growth. However, the current system is sluggish and costly, with fees often exceeding 5%. “The PCC will explore blockchain-based remittance solutions to reduce costs and delays,” Saqib shared in an interview with #CoinDesk .
Blockchain, with its ability to eliminate intermediaries like partner banks, could significantly reduce cross-border transaction costs. According to the Organisation for Economic Co-operation and Development (OECD) in 2020, this technology helps streamline the remittance process, providing clear benefits for countries dependent on remittances like Pakistan.
PCC: Promoting Blockchain and Web3
The Pakistan Cryptocurrency Council is not just stopping at remittances. Saqib stated that the PCC is pushing for a clear legal framework for blockchain and Web3, while exploring initiatives like asset tokenization and establishing regulatory sandboxes. All of this complies with the standards of the Financial Action Task Force (FATF), which removed Pakistan from the gray list in 2022.
Additionally, the PCC plans to invest in blockchain education, skill enhancement programs, and Web3 development to leverage the young workforce – over 60% of Pakistan's 240 million population is under 30 years old. “Our tech-savvy youth are ready to lead blockchain innovation,” Saqib emphasized. This is an opportunity to create jobs and boost the economy in the face of inflation and volatile exchange rates threatening the country.
The Crypto Reality in Pakistan: High Demand, Loose Regulations
Although the State Bank of Pakistan (#SBP ) has banned cryptocurrency and stablecoin transactions since 2018, the country still ranks in the top 5 in Asia in the 2024 Global Cryptocurrency Adoption Index by Chainalysis. People are using digital assets to protect their wealth against inflation and economic instability, despite the legal void. “The demand is clearly very high,” Saqib said. “The PCC wants to harness this untapped potential with a progressive legal framework.”
However, he also warned about the risks of illegal crypto cash flows. “Without regulation, cryptocurrencies can facilitate untraceable cross-border transactions, exacerbating the shortage of USD.” The PCC aims to build a transparent system with strict KYC (Know Your Customer) and AML (Anti-Money Laundering) requirements.
Bitcoin Reserves: Is the Lesson from the U.S. Applicable?
Recently, U.S. President Donald Trump announced plans to establish a strategic Bitcoin reserve from seized assets. Saqib expressed caution in applying this model to Pakistan. “While the idea is appealing, crypto implementation in Pakistan is still in its infancy, and illegal assets are rarely seized on a large scale,” he said. Any move towards a reserve will need thorough discussions with the IMF and FATF to avoid impacting Pakistan's international standing after exiting the gray list.
Trader's Perspective: Opportunities from Binance
Although crypto is banned in Pakistan, domestic traders often trade on international exchanges like Binance. If blockchain is applied to remittances, the demand for stablecoins (like USDT) and Bitcoin could increase, indirectly boosting liquidity on Binance. Binance users in South Asia should closely monitor, as prices $BTC could benefit from this trend in the long term.
Conclusion: A Promising but Cautious Future
The plan to explore blockchain for remittances in Pakistan is an ambitious move, promising to reduce costs and increase efficiency for the $31 billion cash flow per year. However, success depends on balancing innovation and international compliance. For Binance users, this is a positive signal for the South Asian crypto market, but patience is needed for a clear legal framework.
Risk warning: Investing in cryptocurrency carries high risks due to price volatility and legal uncertainties. Only invest what you are willing to lose and conduct thorough research before participating.
