Former Federal Board of Revenue (FBR) chairman and economist Shabbar Zaidi has warned that cryptocurrencies could rival hawala in usage, even though cryptocurrency regulation in Pakistan remains extremely difficult due to strict foreign exchange controls by the State Bank.
Speaking at a session on Adopting Digital Currency and Cryptocurrency in Pakistan: Possibilities and Concerns organized by the Pakistan Institute of International Affairs (PIIA) on Saturday, Zaidi highlighted the challenges in regulating digital assets.
He said that while a law enabling cryptocurrency regulation[1] in Pakistan has been passed and is under parliamentary discussion, enforcing it would be problematic. By design, digital currencies leave no trail, making regulation nearly impossible.
“Cryptocurrencies flourish because they leave no trail. A currency born unregulated cannot be regulated,” Zaidi stated. He explained that the U.S. market has witnessed widespread adoption of digital currencies, but the key difference is its liberal foreign exchange system.
In Pakistan, however, commercial banks cannot buy or sell U.S. dollars without prior approval from the State Bank, which makes integration of cryptocurrencies far more challenging. Despite this, Zaidi noted that their use as an alternative to hawala could increase.
References
- ^ cryptocurrency regulation (www.techjuice.pk)