Pakistan Eyes Blockchain to Enhance Remittance Efficiency and Reduce Costs, Says Crypto Adviser Bilal Bin Saqib

Pakistan is actively exploring blockchain technology to improve the efficiency of remittances sent by its overseas citizens, aiming to lower transaction costs and expedite transfers. The initiative is being led by the newly formed Pakistan Crypto Council (PCC), with Bilal Bin Saqib, the chief adviser to the finance minister, highlighting the technology’s potential to streamline cross-border payments.

Foreign remittances sent from Pakistan’s top ten positions account for the $31 billion total that exceeded 5% fees through traditional banking channels, which process remittances slowly.  The Pakistani government is investigating blockchain technology to improve remittances through direct transactions, which provide both speed and cost savings.

The PCC attempts to promote financial access through decentralized finance (DeFi) and tokenized assets by advocating for specialized regulatory frameworks in blockchain and Web3 technology.  According to Saqib’s evaluation, the blockchain network has the potential to reduce transaction costs while providing strong security measures and full transaction visibility.  He also pointed out that this technology can reduce reliance on existing correspondent banking networks, which slow down payment processes.

This program aligns with Pakistan’s financial infrastructure modernization ambitions since it reflects the global interest in blockchain technology for faster cross-border payment systems.  The OECD and other international bodies have recognized blockchain technology for its ability to revolutionize global finance transfers by eliminating expensive middlemen.

Pakistan’s Approach to Crypto Regulation

Despite the interest in blockchain-based solutions, the State Bank of Pakistan (SBP) implemented a trading prohibition on cryptocurrency in 2018 through its directive, which is applicable to Pakistan.  Pakistan is experiencing an increase in the prevalence of digital assets, despite the fact that the country is still subject to a prohibition on cryptocurrency trading by the State Bank of Pakistan.  Pakistan has been ranked among the top Asian nations in Chainalysis’ 2024 Global Crypto Adoption Index.

 The PCC establishes regulatory guidelines to ensure that financial operations related to cryptocurrency are in compliance with Know-Your-Customer (KYC) and Anti-Money Laundering (AML) regulations.  The council’s objective is to establish regulatory sandboxes and pilot projects to assess blockchain financial applications in accordance with the Financial Action Task Force (FATF) guidelines.

Pakistan’s implementation of blockchain technology will generate innovative financial opportunities as other nations progress in the development of their digital financial assets.  Donald Trump’s recent endorsement of crypto-friendly policies in the United States has prompted comparable regulatory reforms in the Middle East and Asia.

In order to capitalize on blockchain technology’s benefits, the government must exercise extreme prudence when navigating international financial standards.  According to a finance ministry official, the incorporation of blockchain technology into remittance transfers must adhere to global financial standards in order to maintain economic stability and investor trust.

As Pakistan seeks to modernize its financial ecosystem, blockchain’s role in the country’s $31 billion remittance industry could be a significant step toward a more efficient, cost-effective, and transparent financial future.