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Pakistan Turning Towards Cryptocurrency, Even When Its Economy Is Declining

The Pakistani economy is famously in turmoil, and now the citizens of Pakistan are following what most of the other poor countries are: inclining towards cryptocurrencies. The burden of the balance of payments crisis is set to fall on the new administration headed by Imran Khan, who was elected the new Prime Minister on Wednesday. It will be interesting to see how the economic problems that have been prevailing in the country since the beginning of 2018 will be tackled.

The people of Pakistan are faced with severe challenges of economic and political instability. The Pakistani currency has taken a significant dive against the US dollar, despite several efforts made by the country’s central bank, State Bank of Pakistan. The undertaking, earlier this year, banned the country from trading in digital currencies citing reasons such as lack of transparency and anonymity related to cryptocurrency.

This did not stop people from investing the little money they have in the digital currencies. A few Pakistanis have even started trading in Bitcoin to subdue the negative effects of the economic situation that they’re in.

The devaluing Pakistani Rupee clearly shows that the economy is in shackles. The economic analysts have gone on record and said that it is very unlikely for the country to recover anytime soon.

As for the cryptocurrency sphere in the country, the first digital currency Urdubit had to shut down after orders passed by the country’s lawmakers. But, it has been reported that 57 Pakistanis currently own Bitcoins and are active traders of the crypto coin.

Abu Shaheer, the founder of PakCoin, spoke about the prevalent conditions in the country, “People are turning to cryptocurrency as an investment, but slower than the western world as the literacy rate is lower here and it’s a new phenomenon for them. Some are using it as an alternative means of payments … Most people using cryptocurrencies are a day or short-term traders finding investment opportunities in crypto and are growing in number.”

Like Pakistan, countries like Iran and Venezuela have also shown interest in the digital currencies to seek help regarding their crumbling economies. Venezuela launched its state-owned cryptocurrency, Petro, to avoid the economic sanctions imposed by the US. Iran too is reportedly going to follow Venezuela’s footsteps.

With Pakistani fiat declining against the US Dollar and the new administration set to take over the office, it will be interesting to see how events unfold. It will be challenging for the new government to take over when the country is already faced with economic difficulties. Assuming that the conditions will prevail for a relatively long period, the Pakistanis are more likely to hold cryptocurrencies dear.

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