Here is how “Blockchain” technology is revolutionizing the digital landscape of Pakistan

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Any cryptocurrency and Blockchain enthusiast nowadays knows that Blockchain technology is the future. I will address the evolution and effect of Pakistan’s Blockchain technologies in this article. The first industrial movement of the world was heard at the end of the 18th century when steam-powered devices were introduced in the place of hand-made workers in textile factories. The term for factory fell into being because of tiny shops.

Pakistan adopts Blockchain technology to attract remittances

For the first time in the banking sector, Pakistan has implemented Blockchain technology to draw workers’ remittances from Malaysia, which is a step in the direction identified by the Financial Action Task Force (FATF) to tackle the funding of terror and money laundering.

In addition to making financial transfers instant and stable, the technology will also record each move taken by the sender and recipient of remittances. This will continue to tackle the criminal scheme of Hawala and Hundi on an international basis.

The deployment of Blockchain technology, however, does not mean Pakistan has allowed international financial transactions in bitcoin and cryptocurrencies, which remain banned in the country. The State Bank of Pakistan’s (SBP) spokesman, Abid Qamar, told The Express Tribune, “The central bank has allowed the use of the technology which has thousands of uses.”

in a statement on Tuesday, Telenor Microfinance Bank said, “Telenor Microfinance Bank, in partnership with Valyou of Malaysia, has introduced Pakistan’s first Blockchain-based cross-border remittance service, powered by the industry-leading Blockchain technology developed by Alipay – the online payment platform operated by Ant Financial Services Group.”

The Governor of the Central Bank noted that a range of steps has been taken by the Government and the SBP to facilitate the movement of home remittances across formal financial networks. The new Blockchain technology-based remittance service will complement these efforts as the real-time transmission of cross-border remittances will offer ease and facilitation for both senders and recipients.


Challenges in Implementing Blockchain Technology in Pakistan

Between 2013 and 2015, Blockchain came into full swing, but even today there is a limited deployment of Blockchain technology in Pakistan. There are many theories for the gap, such as:

  1. Crisis in Energy:
    First of all the introduction of Blockchain indicates all documents and transfers are made electronically but the energy supply to the country is very unstable with constant load shedding and lack of necessary infrastructure.
  2. Few Practitioners Trained:
    As there were no qualified institutions to train citizens in the domain, Pakistan lacked skilled experts in Blockchain. In this regard, the President of Pakistan introduced the ‘Presidential Artificial Intelligence & Computing Initiative’ (PIAIC) program to prepare Pakistanis with minimal fees for upcoming digital challenges. It seeks to open the doors to the modern world’s future employment and business prospects.
  3. Traditional Business Mindset:
    The majority of organization owners have a conventional mentality. They listen to their rules and do not want to turn to some uncertain technology. They are ignorant of the benefits of Blockchain technology. As a nation, Pakistan prefers traditionalism rather than modernism.
  4. Political Instability:
    Several small companies are based in Pakistan. The vast majority are unable to start up a company that is completely established since it is very difficult for businesses to deal with market dynamics owing to Pakistan’s current political scenario.

It would take some time for Blockchain technology to be completely introduced in Pakistan. But the theory has laid down its groundwork and we see that, slowly, reliable applications are being introduced. It will soon offer wonderful results with public and private sector funding and knowledge of disruptive technologies.

How does this connect to relevant developments in Pakistan?

Pakistan does not have any rules at present. The related regulators i.e. the Central Bank, Securities & Exchange Commission (SEC), and the Ministry of Finance (MOF) is suspected to be working on such projects allegedly financed by US Assistance.


In this sense, the SBP announced the introduction of Blockchain technologies from Malaysia within the remittance region, but cryptocurrencies are still not permitted although non-financial applications are encouraged. This argument, while contradictory, indicates that an expert consultation committee should be formed to promote constructive progress in this direction.

Regulation draughts debated at MOF on “Financial Inclusion by Digital Approaches” often suffer from many technological shortcomings to impede categorization as Fintech criteria are tackled. It could be facilitated by a specialist group.

It is recommended that all regulatory stakeholders, i.e. legal stakeholders, technology stakeholders, and a few others should be incorporated into the development of such initiatives to organize and incorporate the subsequent regulatory and implementation plans.

In the event of the introduction of non-synchronous and silo-based regulation/policies, we risk losing our already poor financial competitive position, a decrease in international remittances which could further trigger capital outflows using such technology by foreign applications. Ensuring the confidentiality of such encrypted financial and non-financial information is another critical area to discuss. So, at commercial and defense levels, we need digital encryption and data protection/privacy legislation.

There is a specified ban on using international cryptos from a public point of view. However, the procedure for enforcing such a ban is not simple. Daily, ground-level business knowledge suggests a reasonably broad flow (mostly out-flow of transactions).

In addition, an SEC warning indicates that there is no regulatory mechanism other than public dissuasion from the use of blockchain-based software. Several seminars on IBM & Microsoft funded blockchain and smart contract systems have been protected by PTCL, but only from technological perspectives.

~This article was contributed by Basir Ahmad who works at Algorand Foundation as an Ambassador for Pakistan~