The people of Pakistan are gradually turning towards cryptocurrency as the Pakistani economy continues to experience a steep decline. With a new administration set to take office, there are questions on whether the government will be able to resolve the current economic crisis that has rocked the country since the beginning of 2018.
Pakistani Economy in Turmoil, Cryptocurrency to the Rescue
These are not the best of times for the people of Pakistan, as the country continues to experience significant economic and political instability. The Pakistani rupee has taken a nosedive, in spite of the country’s central bank’s efforts to bring about some level of balance. Earlier in the year, the nation banned banks from dealing with Bitcoin and other cryptocurrencies—citing the lack of transparency and the anonymity associated with digital currency.
The people of Pakistan, however, have started to turn to cryptocurrency for help. With the little wealth they have, Pakistanis have started to trade in Bitcoin in the hope that it will protect them against the present crisis.
The devaluation of the Pakistani rupee clearly shows how vulnerable the country’s economy is, as foreign reserves have dangerously dwindled. Economists are doubtful that the state will come out of this situation any time soon.
The government’s stance against cryptocurrency led to the shut down of the country’s first virtual currency, the Urdubit. But according to LocalBitcoins, the P2P crypto trading platform, figures show that 57 Pakistanis are presently trading in Bitcoin—a number that seems likely to increase.
Founder of Pakistan-based cryptocurrency, Pakcoin, Abu Shaheer, lent his voice to the current trend in the country, saying:
“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 totally new phenomenon for them. Some are using it as alternative means of payments … Most people using cryptocurrencies are day or short-term traders finding investment opportunities in crypto and are growing in number.”
Pakistan is not the first country whose citizens have turned towards digital currency. Iran and Venezuela have also taken up an interest in cryptocurrency trading as a means of survival. Earlier in the year, Venezuela launched a state-issued cryptocurrency, the petro, as a way of circumventing mounting U.S.-led economic sanctions.
Recently, reports have begun to circulate that Iran may be thinking of following the same route.
Pakistan: An Economy in Crisis
With the Pakistani rupee frequently falling against the dollar, there are fears that it might just tumble off the cliff. The year 2018 has not shown favorable signs yet, as pressure on Pakistan’s fiat currency continues to grow.
Pakistani cricket-star-turned-politician, Imran Khan, won a recent election for his Pakistan Tehreek-e-Insaf (PTI) party. According to the politician, his priority will be to fix the country’s economy.
Speaking on the general election and the economic state of affairs in Pakistan, Gareth Leather, senior Asia economist at Capital Economics told Market Watch:
“Whichever party wins Pakistan’s upcoming general election will take over an economy on the brink of a balance of payments crisis. Growth is likely to slow sharply regardless of who wins Wednesday’s election.”
Assuming these predictions are correct and the country’s economic woes continue for the foreseeable future, it seems likely that more and more Pakistanis may find themselves seeking refuge in cryptocurrencies.
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