M Arham Malik
Pakistan-United States relations are quietly entering one of their more constructive and pragmatic phases in recent years. Moving beyond earlier cycles dominated by crisis-driven engagement or narrowly defined security exchanges, the relationship is now shaped by a broader convergence rooted in economics, technology and cooperative risk management in a competitive global environment. Despite enduring structural and regional challenges, both sides are increasingly focused on building a stable, opportunity-driven partnership with long-term strategic value.
For Washington, global priorities have evolved. The focus is now firmly on geoeconomics, resilient supply chains, technology-driven competitiveness and partnerships that reduce long-term security burdens without large and costly military footprints. Pakistan’s own priorities, economic stabilisation, investment-led growth, digital and technological modernisation, energy security and sustained counterterrorism intersect directly with these objectives. This alignment, more than any single initiative, is shaping the renewed tone of bilateral engagement.
A notable recent signal came in mid-January 2026, when Pakistan signed a memorandum of understanding with SC Financial Technologies LLC, described as an affiliated entity of World Liberty Financial. The MoU explores the integration of a dollar-pegged stable coin (USD1) into Pakistan’s payments architecture to enable faster and cheaper cross-border transactions alongside planned digital currency infrastructure. While still exploratory, the move reflects Pakistan’s growing willingness to align its financial modernisation agenda with US-linked technological and regulatory ecosystems.
Pakistan has framed this initiative around powerful scale drivers. Annual remittances exceed $38 billion, forming a critical pillar of the economy. The domestic digital economy is expanding rapidly, and industry estimates suggest around 40 million crypto users, with trading volumes that could reach $300 billion annually. To manage these trends, Islamabad has accelerated regulatory engagement through new virtual asset institutions, signalling an effort to move digital finance from informal activity to a supervised growth-oriented sector. For the US, such developments align with broader goals of transparent financial systems, secure digital rails and the integration of emerging markets into regulated global networks.
Security convergence remains a structural pillar of the relationship. Since the post-2021 transition in Afghanistan, militant activity has surged along the Pakistan-Afghanistan belt, reinforcing the shared interest in counterterrorism and regional stability. Pakistan’s counterterrorism operations have remained intense. Official briefings for 2025 cite 5,397 terrorist incidents nationwide, over 75,000 intelligence-based operations, and 2,597 militants killed. While tactics and narratives may differ, both Islamabad and Washington recognise that unchecked militancy carries regional and transnational consequences, including threats to trade routes, investment confidence and human security.
At the same time, strategic competition adds urgency and complexity. The United States is viewed by Pakistan as a strategic partner, particularly in finance, technology and global market access. China, meanwhile, remains an important economic partner, especially in infrastructure and industrial development. Pakistan’s approach is not one of bloc politics but of balance, seeking diversified partnerships that reduce overdependence on any single power. In Washington, this balancing act is increasingly understood, even if not always publicly acknowledged, as a reality of middle-power diplomacy in a multipolar world.
The India factor continues to loom large in this equation. South Asia remains a nuclearised region with unresolved disputes and periodic crises. For the United States, crisis stability and de-escalation mechanisms between Pakistan and India remain strategically relevant not only to prevent conflict but also to protect broader regional economic and security interests. For Pakistan, sustained engagement with Washington offers an additional channel to underscore the importance of restraint, dialogue and risk reduction in an increasingly volatile neighbourhood.
Geoeconomics, however, offers the most durable anchor for the Pakistan-US relationship. Pakistan’s mineral potential is widely valued at between $6 and $8 trillion, including copper, lithium and rare earth elements that are critical for the global energy transition and advanced manufacturing. Yet this potential remains largely untapped. Currently, an estimated 83 American firms operate in Pakistan, generating over $3 billion annually, but US foreign direct investment remains underutilised at below $300 million per year. This gap points less to a lack of opportunity and more to the absence of modern frameworks and sustained facilitation.
There is growing space for a revamped Bilateral Investment Treaty that reflects contemporary realities, including investor protections, dispute resolution and sustainability standards. Pakistan’s Special Investment Facilitation Council (SIFC) has been positioned as a one-window platform to accelerate high-value projects and reduce bureaucratic friction. Flagship ventures such as the Reko Diq copper and gold project illustrate what is possible. Projected to generate approximately $74 billion over 37 years, Reko Diq has already attracted interest in potential US Export-Import Bank financing discussions, reportedly around $1 billion, underscoring how strategic minerals can translate into strategic convergence.
Ultimately, Pakistan-US relations are not returning to old templates, nor are they being defined by a single grand bargain. Instead, they are evolving into a more mature, interest-driven partnership shaped by economic integration, technological collaboration and shared security concerns in an era of strategic competition. If both sides can sustain this pragmatic approach grounded in geoeconomics and realistic expectations, the relationship may finally acquire the durability that has long eluded it.
The writer is a freelance columnist.
