What does Pakistan's Bitcoin present and future look like, with the acceptance and state-sponsored mining?
The State Bank of Pakistan has outlawed bitcoin trading, making it illegal for companies, banks, and other institutions to do so in the Islamic Republic of Pakistan.
However, Pakistan has the world's fourth-largest population, with roughly half of the population between the ages of 15 and 40, and just around 4% of the population over 65. As a result, despite the State Bank of Pakistan's ban, bitcoin adoption is rapidly growing in Pakistan. Many Pakistani freelancers in the tech industry are paying in bitcoin. This takes us to the next point.
Furthermore, regulatory progress has been made in one part of the world, leading the government to invest its own funds in bitcoin mining farms.
When it comes to Bitcoin adoption, taxation, and mining, Pakistan is one of the most intriguing regions in the world.
The Trading trend of Bitcoin in pak:
Despite the government's ban on bitcoin and other cryptocurrencies, regular trade volumes are growing in Pakistan.
Bitcoin is heavily traded in Pakistan on peer-to-peer exchanges such as Paxful and LocalBitcoins. Other trades take place in social media groups and online forums, where freelancers sell their bitcoin to cash-to-money exchangers, who then resell it at a 5 percent to 10% premium.
Bitcoin is currently not recognized as a medium of exchange in Pakistan.
MINING industry of BITCOIN in Pak:
The Bitcoin and cryptocurrency mining industries flourished in Pakistan until April 2018, when the government outlawed cryptocurrency trading and mining.
Despite the fact that the government has been shutting down mining farms since the ban was imposed, Pakistan's mining industry has been steadily growing. In the end, the ban resulted in a rise in the number of peoples.
Ultimately, the ban resulted in a rise in the number of people mining bitcoin and other cryptocurrencies at home, with the majority of them using mining pools such as ViaBTC, Braiins, and Slush Pool.
The Provincial Assembly of Khyber Pakhtunkhwa (KPK), one of Pakistan's four provinces, passed a resolution legalizing cryptocurrencies and bitcoin mining on December 2, 2020. KPK authorized the use of government funds to mine bitcoin earlier this year. The government of KPK will set up two bitcoin mining farms with expert analysts.
According to the paper, “[KPK Information Technology Advisor Ziaullah Bangash] said that the government believes Pakistan should not fall behind in the field of digital currency mining.” “He said that the [KPK] government had taken the first step and that other provinces would follow suit.”
With the mining industry now legalized in at least one province of the country, private sectors and investors will undoubtedly set up new mining farms in the near future.
However, there is one potential stumbling block for Bitcoin miners. There's been a power shortage in Pakistan for years and regular power shutdowns are a normal thing in the country. Even in large cities like Lahore and Karachi, it does not surprise anyone if the power goes off for several hours.
Scam vs Education:
Because of a lack of education and misguided legislation, the crypto scam rate in Pakistan, as in other developing countries, is higher than in developed countries, making it a lucrative market for scammers.
Many scam schemes were promoted in the run-up to and during the 2017 bitcoin bull run, which was the most significant factor in the country's bitcoin and cryptocurrency ban. Scam ventures like OneCoin have been marketed to Pakistani investors as a way to make fast money in a short period of time.The people behind these projects were mainly Pakistani-British nationals who financed the projects and defrauded investors out of millions of dollars, only to find out later that the company had vanished.
As a result, the key to Bitcoin's potential success in Pakistan is ensuring that people are properly educated about the latest technology, as many people still believe Bitcoin is a fraud or a "get rich fast" scheme.
To that end, the Pakistan Bitcoin Association aims to inform individuals and companies about this emerging asset class and how it is changing the world for the better.
Nonetheless, I am concerned that cryptocurrency scammers will return to Pakistan now that it is legal to mine and trade cryptocurrencies. The government should vigorously pursue those who are bad actors, and the issuance and promotion of new cryptocurrencies in the area should be strictly controlled. This, in theory, will remove fraudsters and pave the way for Bitcoin's continued acceptance.