Pakistan Eyes Blockchain to Boost Remittances
Pakistan is exploring the use of blockchain technology to modernize its remittance system. According to Bilal bin Saqib, the finance minister’s chief advisor on the newly formed Pakistan Crypto Council (PCC), this initiative aims to improve the speed and reduce the costs associated with transferring money from overseas workers.
The Pakistan Monument (usmanaliaslam/Pixabay)
Saqib, in an interview with CoinDesk, highlighted that overseas Pakistanis sent over $31 billion to the country during 2023-24 via traditional channels. However, he noted that these methods are often slow and expensive, with fees potentially exceeding 5% per transaction.
The PCC is advocating for a clear regulatory framework for blockchain and Web3 innovation. The council is also investigating initiatives like tokenizing real-world assets while remaining compliant with Financial Action Task Force (FATF) standards. The FATF removed Pakistan from its gray list in 2022.
“The PCC will investigate blockchain-based remittance solutions to reduce costs and delays,” Saqib stated. “Additionally, we’ll invest in blockchain education, upskilling programs, and Web3 development to cultivate talent, boost employment, and drive economic growth.”
Blockchain technology could help by disintermediating entities like correspondent banks, potentially lowering the cost of international transactions, as observed by the OECD in 2020.
Although the State Bank of Pakistan (SBP) banned financial institutions from facilitating cryptocurrency transactions in 2018, Pakistan is still recognized as one of the top five Asian nations in Chainalysis’ Global Crypto Adoption Index 2024. A significant portion of the population uses digital assets as a hedge against inflation and foreign exchange rate volatility.
“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 explained. “The PCC aims to unlock this untapped potential by advocating for a clear, progressive regulatory framework.”
Saqib also addressed concerns about illegal crypto outflows, stating, “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.”
He also commented on the evolving regulatory policies globally, including in Southeast Asia, and the recent support for digital assets by Donald Trump.
“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.
