KARACHI
\nCryptocurrencies and property remained top performing assets in Pakistan during the outgoing 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.
\nPakistan\u2019s central bank declared in 2018 that virtual currencies like Bitcoin were not legal tenders issued or guaranteed by the country\u2019s government. But despite not being recognized by the State Bank of Pakistan (SBP), 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, Arab News reported
\n\u201cPakistan recorded around $20 billion of cryptocurrency value in 2020-21, showing an abnormal increase of 711 percent,\u201d the Federation of Pakistan Chamber of Commerce and Industry (FPCCI), the country\u2019s top trade body, said in a new research report.
\nThe central bank has not commented on FPPCI\u2019s findings so far.
\nCryptocurrencies thrived during the coronavirus pandemic on the back of retail investor influx, huge leverage availability and low transaction costs, FPCCI said.
\n\u201cThe 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,\u201d the chamber\u2019s report said.
\nAbout 67 percent of crypto investors in Pakistan use centralized services whereas only 33 percent use decentralized financing (DeFi) 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.
\nTraditional international payment instruments, such as debit and credit cards, cannot be used for the purchase of these currencies due to the SBP\u2019s prohibition on financial institutions under its umbrella.
\nMost investors, therefore, use bank transfers or utilize other means like JazzCash or EasyPaisa for the purpose, said the FPCCI report.
\nWhile Pakistan\u2019s northwestern Khyber Pakhtunkhwa province unanimously passed a resolution to legalize cryptocurrency in December 2020 and formed an advisory committee in March 2021, it acknowledged that the ultimate decision on digital currency could only be taken by the federal government.
\nThe FPCCI has demanded a national cryptocurrency strategy, saying there should be a proper regulatory framework to adopt the new financial ecosystem at the earliest to safeguard the economic interests of people and minimize the vulnerabilities of the new system.
\nThere are more than 5,000 different cryptocurrencies in circulation in the world. These virtual or digital currencies are based on blockchain technology which is a decentralized ledger of all transactions across a peer-to-peer network.
\n\u201cAmongst major asset classes used by local investors, cryptocurrency and property remained the best performing asset classes in Pakistan in 2021,\u201d another report issued by Topline Securities, a major brokerage house in Karachi, said on Friday.<\/p>\n","protected":false},"excerpt":{"rendered":"
KARACHI Cryptocurrencies and property remained top performing assets in Pakistan during the outgoing 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. Pakistan\u2019s central bank declared in 2018 that virtual currencies like Bitcoin were not legal tenders issued […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-235233","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"\n