Pakistan Considers Blockchain to Enhance $31 Billion Remittance Process

Pakistan is considering blockchain technology to enhance remittance processes, according to Bilal bin Saqib, chief adviser to the finance minister. Key points include:

• Over $31 billion in remittances sent by overseas Pakistanis in 2023-24 via traditional channels, often incurring fees over 5%.
• The Pakistan Crypto Council (PCC) will explore blockchain-based solutions to lower costs and improve transaction speeds.
• Blockchain can reduce reliance on correspondent banks, potentially decreasing cross-border transaction costs, as noted by the OECD.
• Cryptocurrency trading remains banned since a 2018 circular from the State Bank of Pakistan (SBP).
• Despite restrictions, Pakistan ranks among the top five Asian countries in Chainalysis' 2024 Global Crypto Adoption Index, driven by youth interest in digital assets.
• The PCC aims to promote a regulatory framework for crypto activities, including compliance with KYC and AML standards.
• The PCC is also considering tokenizing real-world assets and setting up regulatory sandboxes while adhering to Financial Action Task Force (FATF) guidelines.
• Concerns exist regarding illegal crypto outflows and their potential impact on dollar shortages without regulation.

Saquib highlighted that any move towards establishing a strategic bitcoin reserve would require careful consideration of international relations and financial oversight.