Pakistan to Urge Towards Cryptocurrency Due to Economic Crisis

Pakistan is one among the handful of countries having the most significant name with the leading population and economy as well. It also holds its fame as they own the largest military.

The country’s economy is experiencing the similar boom-and-bust cycle that might knock the door of the International Monetary Fund (IMF). Debt is escalating, the ongoing-account shortage is expanding, reserves are dropping and the currency has been void four times within eight months.

There’s news that Pakistan is most likely to have a new government which will be headed by Imran Khan, the former cricketer. He has announced his victory of Tehreek-e-Insaf (PTI) party and will certainly be Pakistan’s prime minister.

The senior Asia economist, Gareth Leather reported that:

“Whichever party wins Pakistan’s upcoming general election will take over an economy on the brink of a balance of payments crisis. Growth is likely to slow sharply regardless of who wins Wednesday’s election.”

Earlier in 2018, this country restricted its banks to operate with cryptocurrencies. This followed the shutting down of the Urdubit, Pakistan’s first bitcoin exchange. However, still, there are customers those who have continued using the cryptocurrency.

According to the cryptocurrency exchange LocalBitcoins, currently, there are 57 customers from Pakistan who are trading Bitcoin. Since the economic crisis has evolved in the country, people are looking to sustain themselves from the growing inflation. The price of Pakistani rupee and fiat currency is dropping against dollars and people are rushing towards accepting the alternative option such as Bitcoin and cryptocurrency. Moreover, this year the foreign currency reserve seems to be running low.

Pakistan Looking for the Hold

The expert analysis says that Pakistan for another bailout may be seen turning to the International Monetary Fund. Meanwhile, the country is levying rules for those looking to drag money out of the country. Earlier this week, reportedly that their central bank raised the amount of red tape required to access dollars.

Due to the worldwide mortification, the international watchdog- the Financial Action Task Force (FATF), standing against money laundering and terrorism, has also added Pakistan on a grey list of “jurisdictions with strategic deficiencies”. The reason behind this step of FATF is the country’s “structural deficiencies” in combating the finance terrorism (CFT) and anti-money laundering (AML). For Pakistan, this is not for the first time to be on the list of FATF; the country was already jotted back in 2008.

The founder of Pakcoin- the cryptocurrency platform of Pakistan, Abu Shaheer said that:

“People are turning to cryptocurrency as an investment, but slower than the western world as the literacy rate is lower here and it’s a totally new phenomenon for them. With falling Rupee, some are using it as alternative means of payments.” He added, “Most people using cryptocurrencies are a day or short-term traders finding investment opportunities in crypto and are growing in number.”

Venezuela and Pakistan on the Same Boat

Venezuela also quickly moved towards Bitcoin as the inflation started to show up rapidly. Over recent years, the country has been facing the crisis since oil prices dropped below $100 in 2014. Beeping at the situation, the CEO of ShapeShift, Erik Voorhees posted a tweet:

Volume of person-to-person Bitcoin trading in #Venezuela hits record high last week… sadly as much a measure of BTC adoption as it is of #bolivar debasement. https://t.co/mNAuT3KWb4

— Erik Voorhees (@ErikVoorhees) April 19, 2018

As Pakistan’s economy is currently presenting the similar signs as Venezuela did by shuffling to cryptocurrency during the crisis.  Pakistani’s are just hoping that the new government may improve the current economic situation. The new leader might embrace cryptocurrency in a positive way to enhance the future of Pakistan.

What do you think will bring the future of Pakistan? Will it overcome its crisis or drip into the black hole? Share your views with us on Twitter.