Pakistan eyes blockchain to improve remittance flow and cut costs
Pakistan, one of the top 10 countries for remittances, is exploring blockchain technology to make cross-border transfers faster and more cost-effective, according to Bilal bin Saqib, chief adviser to the finance minister and a member of the newly established Pakistan Crypto Council (PCC).
Overseas Pakistanis sent over $31 billion in remittances through traditional channels in the 2023–24 fiscal year. However, these transfers are often slowed down by intermediaries and come with high fees, which can exceed 5%, Saqib told CoinDesk in an interview.
Remittances – funds that migrants send back home – play a significant role in stabilising Pakistan’s economy. These funds act as a financial cushion during economic downturns and contribute to long-term growth.
Exploring blockchain solutions
“The PCC will investigate blockchain-based remittance solutions to reduce costs and delays,” Saqib said. “Additionally, we’ll invest in blockchain education, upskilling programs, and Web3 development to cultivate talent, boost employment, and drive economic growth.”
Blockchain technology has the potential to streamline fund transfers by minimising reliance on intermediaries such as correspondent banks. This could dramatically cut down the costs of cross-border transactions, as previously noted by the OECD in a 2020 report.
Crypto regulation and market potential
Cryptocurrency trading is still banned in Pakistan following a 2018 directive from the State Bank of Pakistan (SBP), which prohibits financial institutions from facilitating cryptocurrency transactions. Despite this, Pakistan remains one of five Asian countries featured in Chainalysis’ 2024 Global Crypto Adoption Index. A growing number of Pakistanis are turning to digital assets to protect themselves from inflation and currency volatility.
“This reflects significant demand despite the regulatory vacuum,” Saqib said. “With over 60% of Pakistan’s 240 million people under 30, our tech-savvy youth are poised to drive blockchain and Web3 innovation.”
The PCC plans to push for a clear regulatory framework that supports crypto activity while ensuring compliance with international standards. “The PCC aims to unlock this untapped potential by advocating for a clear, progressive regulatory framework,” Saqib said.
Addressing regulatory gaps
The PCC is also looking into tokenising real-world assets and setting up regulatory sandboxes to test new blockchain-based financial products. Saqib noted that any framework would need to align with guidelines from the Financial Action Task Force (FATF), which removed Pakistan from its gray list in 2022.
“Illegal crypto outflows are a concern,” Saqib said. “Without regulation, cryptocurrencies can facilitate untracked cross-border transactions, exacerbating dollar shortages. The PCC’s first step is to establish a robust, transparent regulatory framework mandating know-your-customer (KYC) and anti-money laundering (AML) compliance for all crypto activities.”
Global influence on crypto policy
International developments are also influencing Pakistan’s stance on crypto. In the United States, President Donald Trump recently announced plans to establish a strategic bitcoin reserve utilising assets seized in enforcement actions.
Saqib acknowledged that while a similar reserve could be appealing for Pakistan, it would require careful consideration. “Pakistan’s crypto enforcement is nascent, and illicit holdings are rarely intercepted at scale. Any move toward a strategic reserve would require careful dialogue with the IMF and FATF to avoid jeopardising international support or Pakistan’s post-gray-list status,” he said.
The PCC’s focus on building a transparent regulatory environment and supporting blockchain innovation could position the country as a competitive player in the digital economy.
(Photo by Unsplash)
See also: BBVA gets OK for cryptocurrency trading in Spain
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