Pakistanis own $20bn in cryptocurrencies, more than federal reserves: Report
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Loading... - Hitesh Jain
- 29 Dec 2021
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Cryptocurrencies and property remained top-performing assets in Pakistan this year, with the country recording about $20 billion in cryptocurrency value in 2021, an amount in excess of current federal reserves, according to new research studies.
The central bank declared in 2018 that virtual currencies such as Bitcoin were not legal tender issued or guaranteed by the government. But despite not being recognized by the State Bank of Pakistan, interest in cryptocurrencies has been on the rise.
The country ranked third in the Global Crypto Adoption Index in 2020-21, after India and Vietnam.
“Pakistan recorded around $20 billion of cryptocurrency value in 2020-21, showing an abnormal increase of 711 percent,” the Federation of Pakistan Chamber of Commerce and Industry, the country’s top trade body, said in a new research report. The central bank has not commented on the FPPCI’s findings so far.
Cryptocurrencies have thrived during the coronavirus pandemic, the federation said, adding: “The biggest crypto exchange used by Pakistani investors is Binance, which is headquartered in Cayman Island, whereas other renowned platforms include Localbitcoins.com, Binomo and others.”
About 67 percent of crypto investors in Pakistan use centralized services, whereas only 33 percent use decentralized financing platforms for crypto-related transactions.
The peer-to-peer model for investing in cryptocurrencies works in a way that buyers transfer money directly to sellers, whereas service providers act as intermediaries and provide escrow services to hedge counterparty credit risks.
Traditional international payment instruments, such as debit and credit cards, cannot be used for the purchase of these currencies due to the SBP’s prohibition on financial institutions under its umbrella.
Most investors, therefore, use bank transfers or utilize other means such as JazzCash or EasyPaisa for the purpose, said the FPCCI. Read More…
