The Scenario of Regulating Blockchain Technology in Pakistan
Currently, investors are searching for opportunities to invest in blockchain technology due to its decreasing demand in different sectors like the real estate sector. The lack of sufficient startups in Pakistan is missing a valuable opportunity. Cryptocurrency uses blockchain technology for secure transactions, but one main thing is that cryptocurrency does not cover the whole blockchain technology.
Blockchain technology digitally secures the information of all transactions, which can be distributed to different computer systems. The Crypto market is the largest case of using this technology, securing the users’ information that can’t be changed. The technology advanced to add more coins after the success of altcoins. The new digital assets are launched in the market because of the success of Bitcoin. Web3, the internet based on blockchain, encompasses much more. This new market will create a business environment free of government intervention that delivers the public’s powers.
Web3 blockchain technology provides an opportunity for Pakistan to capitalize on demand. That can take many forms, including crypto investments, building blockchain applications, and remotely working for global Web3 startups. The first has taken off already, as evidenced by the country ranking third on the Global Crypto Adoption Index 2021 as its traded value soared 711 percent to around $20 billion during FY21. The presented figure was the figure that the Federation of Pakistan Chambers of Commerce and Industry misconstrued as crypto assets held by citizens and subsequently did rounds on the local broadcast and social media.
Pakistani citizens hold a sufficient amount of assets in the crypto market. However, the regulatory bodies think about the ban due to excessive capital outflow coupled with money laundering and terror financing activities.
The Scenario of Regulation
Banning digital assets in the country is not the solution labeling the fraud as the base of this step. Bringing it within the regulatory ambit would introduce stronger Know Your Customer (KYC) requirements and earn taxes. For example, India’s latest digital currency bill proposes to tax capital gains from crypto at 30pc, the same as betting and gambling, to account for its more speculative nature. Why are policymakers of Pakistan ignoring this opportunity?
US analysts calculated Pakistan’s $109 billion opportunities over the next 20 years. The US Atlantic council recommended the three suggestions for Pakistan. The creation of digital identity using the NADRA will regulate crypto investment. Proper awareness in the investment community will prevent them from the risks of the crypto market. It finally formalizes exchanges as registered entities, tying wallets to digital identity and categorizing non-registered wallets as foreign. The economy regulators claimed the digital assets were beyond their mandate. SBP should communicate with the IT sector to make the strategy for regulating the digital assets.
Source:
https://www.dawn.com/news/1677527/why-blocking-pakistan-out-of-blockchain-may-cost-us-billions-of-dollars
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