Crypto diplomacy

Crypto diplomacy is the strategic use of cryptocurrency and blockchain technology as tools for advancing geopolitical, economic or diplomatic objectives between nations, organisations or influential actors. It involves leveraging digital assets, decentralised finance (DeFi) and blockchain infrastructure to foster international partnerships, influence policy, attract investment and gain strategic advantages in global relations.

In the context of Pakistan, CEO of the Pakistan Crypto Council (PCC) and Member of the British Empire (MBE) Bilal Bin Saqib has emerged as a central figure linking domestic crypto advocacy with global financial interests. His collaboration with World Liberty Financial, a firm owned by Eric Trump and Donald Trump Jr, and its managing partner Zack Witkoff, signals a new phase in Pakistan’s crypto diplomacy. This alliance blends political influence, blockchain investment and Pakistan’s soft power -- positioning Pakistan as a potential gateway for the US-backed Web3 ventures targeting emerging markets.

Pakistan’s crypto diplomacy has four key elements: (i) strategic economic partnerships that align Pakistan’s economic interests with geopolitical strategy; (ii) gaining geopolitical leverage that enhances Pakistan’s credibility and attracts international stakeholders; (iii) Pakistan’s integration into the new Global Financial Systems, potentially bypassing traditional financial gatekeepers; and (iv) navigate regional rivalries eg, with India.

In the emerging global landscape, digital currencies will redefine capital flows. In the emerging global landscape, influence will hinge on technological prowess and strategic connections. Pakistan must leverage figures like Bilal Bin Saqib to build credible international bridges.

Here are five specific, actionable things Pakistan must do to strengthen its position in crypto diplomacy and the global digital economy: (i) Pakistan must move beyond ad-hoc bans and issue clear, investor-friendly regulations; (ii) Pakistan must create and fund a coordinated national strategy for blockchain deployment, with ministries like IT, finance and commerce working in sync; (iii) Pakistan must establish a crypto-friendly SEZ with zero capital gains tax on crypto for 5-10 years; (iv) Pakistan must use tokenised bonds or sukuk to raise local and diaspora capital; and (v) Pakistan must digitise remittance flows using blockchain to enhance transparency, speed and cost-efficiency, reducing the $2.5 billion in annual fees charged by financial intermediaries, including banks, MTOs and exchange companies.

Yes, crypto diplomacy is reshaping global finance, influence and alliances. Yes, crypto is about economic innovation -- and crypto diplomacy is about geopolitical relevance. Yes, crypto diplomacy is the convergence of technology and diplomacy. By positioning itself as a South Asian crypto hub, Pakistan can capitalise on its 25 million active crypto users and $300 billion in annual transaction volume to attract foreign investment, foster blockchain innovation and create high-tech jobs. For Pakistan, this is a once-in-a-generation opportunity to leapfrog legacy barriers and reimagine its place in the global order.

The writer is a columnist based in Islamabad.