ISLAMABAD: Ghulam Ahmed, 38, takes a break from his bitcoin consulting firm once a week to join a WhatsApp group with hundreds of people interested in learning how to mine and sell cryptocurrencies in Pakistan. Many people, from housewives searching for a side hustle to wealthy investors hoping to invest in cryptomining hardware, have little understanding of traditional stock markets but are hungry to profit.
“When I open the session for inquiries, there’s a torrent of messages, and I spend hours answering them and teaching them basic things about cryptocurrencies,” said Ahmed, 38, who resigned his job in 2014 because he believed mining Bitcoin would be more profitable.
Thousands of views of relevant videos on social media and transactions on online exchanges have fueled a surge in cryptocurrency trading and mining in Pakistan.
While cryptocurrency is not banned in Pakistan, the Financial Action Task Force (FATF), a worldwide money laundering watchdog, has urged the government to further regulate the business. Pakistan is on the FATF’s grey list of nations under surveillance for failing to prevent terrorist financing and money laundering. The federal government has responded by forming a group to explore cryptocurrency regulation, which comprises FATF monitors, federal ministers, and chiefs of the country’s intelligence agencies.
“Half the committee members had no idea what it was and didn’t want to comprehend it,” said Ali Farid Khwaja, a partner at Oxford Frontier Capital and chairman of KASB Securities, a stock brokerage in Karachi. “The good news is that this committee was formed. The necessary government bodies that need to get things done are on board, and the good news is that no one wants to stand in the way of technological advancement.” Reza Baqir, the governor of the country’s central bank, stated in April that the authority was looking into cryptocurrencies and their potential for bringing off-the-books transactions into a regulatory framework. He told CNN, “We hope to be able to make some statement on it in the coming months.” Baqir declined to comment on the matter when contacted by Reuters. Even the educational sector is on board. The Lahore University of Management Sciences, one of the country’s major universities, obtained a US$4.1 million grant in February to research the technology from Stacks, a blockchain network that connects Bitcoin to apps and smart contracts.
INVESTMENT AND LEGALIZATION
For bitcoin supporters, these steps can’t come fast enough.
Institutions have viewed those involved in cryptocurrency trading with suspicion in the past, fearful of suspected links to money laundering.
Ahmed claims the Federal Investigation Agency (FIA) has detained him twice and accused him with money laundering and computer fraud, although the charges have never been proven in court.
The FIA confiscated a bitcoin mining farm he had set up in Shangla, Pakistan’s northern Khyber-Pakhtunkhwa region, that ran on its own hydroelectric power on one occasion, he claimed. The FIA did not respond to a request for comment from Reuters. Waqar Zaka, a former TV host with over a million Youtube subscribers, has been urging officials for years to not just legalize but also invest in the sector. Zaka, like Ahmed, had put up a hydroelectric-powered cryptocurrency mining farm. Now, the provincial government of Khyber-Pakhtunkhwa has appointed Zaka and Ahmed to a commission examining how the province may profit from such projects. The group revealed in March that it was looking into establishing other mining farms utilizing Zaka’s facility as a model. Despite the difficulties, Pakistan’s cryptocurrency growth is showing no signs of slowing down. There are a plethora of Pakistan-based social media groups describing how to trade and mine cryptocurrencies, some with tens of thousands of Facebook followers. Hundreds of thousands of people have seen cryptocurrency videos in Urdu on YouTube. Hundreds of Pakistani traders are listed on online cryptocurrency exchanges, the most of which are headquartered outside of Pakistan, such as Localbitcoins.com, which has thousands of transactions. According to online analytics firm SimilarWeb, apps like Binance and Binomo, which track and trade cryptocurrencies, have more downloads than some of the country’s top banks’ apps. “You can’t stop crypto,” Ahmed said, adding that the sooner Pakistan regulates the industry and joins the rest of the world, the better. (Umar Farooq contributed reporting, and Karishma Singh edited the piece.)/n
