From Dubai to Islamabad: bridging the crypto divide

Imagine, a staggering $35 billion in cryptocurrency transactions flooded into Dubai in just one year, according to a report by Chainalysis. Imagine, this digital gold rush saw a colossal 67 per cent of investments pouring in from deep-pocketed institutional players, each transaction exceeding a cool $1 million.

A mere three-hour, 35-minute flight separates the crypto paradise of Dubai from the scenic, but economically struggling, Islamabad. While Dubai reels in crypto billions, Islamabad struggles to attract foreign capital. In April 2024, a meagre $358 million in foreign direct investment (FDI) trickled into Pakistan -- a stark contrast to the crypto tsunami sweeping across the Gulf.

Islamabad, a mere three-hour, 35-minute flight from Dubai’s thriving crypto hub, needs to act decisively: establish a cryptocurrency exchange in Pakistan; create a government-regulated cryptocurrency exchange to provide a secure and reliable platform for trading cryptocurrencies; and ensure the exchange adheres to strict AML/KYC standards and operates with high levels of security and transparency.

Just a three-hour, 35-minute flight separates Islamabad from the cryptocurrency boom in Dubai. Pakistan must act decisively. Islamabad must allow tax-free crypto trading. Pakistan can attract billions by eliminating capital gains taxes on cryptocurrency trading profits.

Just a three-hour, 35-minute flight separates Islamabad from the cryptocurrency boom taking place in Dubai. Islamabad must urgently establish a regulatory sandbox for crypto businesses. Islamabad must create a controlled environment for cryptocurrency businesses to experiment and innovate. Islamabad must offer two things: regulatory flexibility and reduced compliance burdens.

Islamabad, a mere 3-hour, 35-minute flight from Dubai, sits at a crossroads. Islamabad must incentivise blockchain adoption. Islamabad must offer tax incentives, such as reduced corporate taxes.

Why can’t Pakistan attract $35 billion in cryptocurrency investment like the UAE? The answer lies in a confluence of factors. Pakistan’s murky regulatory landscape breeds uncertainty, deterring both domestic and foreign investors. Cryptocurrency businesses grapple with restricted access to banking services, hindering their operations. Yes, limited access to high-speed internet further exacerbates these challenges. To capitalise on this burgeoning sector, Islamabad must urgently address these critical bottlenecks and secure its slice of the multi trillion-dollar crypto pie.