Bitcoin II

El Salvador made history on September 7, 2001, by becoming the world’s first country to adopt Bitcoin as legal tender. This groundbreaking move has had several notable impacts. Bitcoin has provided financial services to the unbanked population of El Salvador, particularly those in rural areas with limited access to traditional banking.

It has also reduced the costs of sending remittances to the country, benefiting many Salvadorans who depend on these funds. Moreover, Bitcoin’s adoption has attracted ‘crypto tourism’, with enthusiasts and investors visiting El Salvador to experience its unique Bitcoin ecosystem firsthand.

The UAE, since the launch of the Dubai Virtual Assets Regulatory Authority (VARA) on March 9, 2022, has made significant strides in establishing itself as a global crypto hub. A major milestone was achieved on October 7, 2024, when the country exempted all crypto transactions from value-added tax (VAT). This decision, combined with VARA’s regulatory framework, has attracted over $35 billion in institutional crypto investments.

South Korea has successfully attracted $18 billion in cryptocurrency investments through a strategic approach. South Korea’s three secrets: First, one of the first countries to embrace cryptocurrency technology. Second, fostering a favorable environment for the crypto industry. Three, maintaining regulatory clarity implementing regulations to oversee cryptocurrency activities.

India, Bangladesh, Nigeria, Kenya, Ghana, Philippines, Indonesia, Vietnam, Thailand, Myanmar, Cambodia, Laos, Nepal, Bhutan, Maldives and Mongolia are all reaping benefits out of maintaining favorable attitudes towards cryptocurrencies. India has attracted $7 billion. Bangladesh has seen an increase in crypto adoption, particularly for payments and remittances.

Nigeria now has many businesses accepting cryptocurrency payments. Kenya has seen a surge in crypto adoption, particularly for mobile payments and remittances. Ghana is witnessing a growing number of crypto exchanges and businesses. Indonesia now has a number of exchanges and startups operating in the country. Nepal has seen an increase in crypto adoption, particularly for remittances.

For Pakistan, cryptocurrency investments can stimulate economic growth by creating jobs, attracting foreign capital, and fostering innovation. For Pakistan, cryptocurrencies can provide financial services to the unbanked Pakistanis (around 80 per cent of Pakistan’s adult population is unbanked). For Pakistan, the development of the cryptocurrency industry will enhance Pakistan’s global competitiveness and attract foreign investment.

For Pakistan, cryptocurrencies can facilitate easier and more cost-effective remittances (some sources claim that remittances to Pakistan through unofficial channels could be as high as $30 billion per year). For Pakistan, remittances can be turned into a pillar of economic growth.

Pakistan’s strategic global positioning, coupled with its fast-growing technology sector, presents a compelling opportunity for attracting substantial cryptocurrency investments. To capitalise on this trillion-dollar potential, Pakistan must prioritise three key initiatives. First, establish a well-defined regulatory framework in order to provide the necessary legal clarity and investor confidence. Second, offer tax incentives to crypto-related businesses in order to create a more attractive investment environment. Third, develop dedicated innovation hubs to foster a collaborative ecosystem for cryptocurrency startups and entrepreneurs.

Pakistan must position itself as a competitive and attractive destination for cryptocurrency investments, driving economic growth and technological advancement.

The writer is a columnist based in Islamabad. He tweets/posts @saleemfarrukh and can be reached at: farrukh15@hotmail.com