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PAKISTAN’S “CRYPTO SOMERSAULT”

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PAKISTAN’S “CRYPTO SOMERSAULT”

Context:

  • In May 2025, Pakistan announced the creation of its first government-backed Strategic Bitcoin Reserve.
  • This is a major shift in Pakistan’s approach to cryptocurrencies and is viewed as a strategic move to build closer ties with the US, especially under the influence of President Donald Trump’s administration.

WHAT IS PAKISTAN’S NEW CRYPTO MOVE?

  • Pakistan is setting up a Strategic Bitcoin Reserve, which means it will officially hold Bitcoin as part of its national reserves.
  • Traditionally, countries hold gold or foreign currencies for such reserves.
  • The announcement was made by Bilal Bin Saqib, CEO of the Pakistan Crypto Council, at the Bitcoin Vegas 2025 conference in Las Vegas on May 28, 2025.
  • The event was attended by important US figures like Vice President JD Vance and Donald Trump’s sons, Eric and Donald Jr., highlighting the political importance of the announcement.
  • Pakistan aims to present itself as a modern digital innovation hub, driven by its young population and new technology leaders.

WHY IS PAKISTAN SUDDENLY INTERESTED IN CRYPTO?

  • Pakistan’s move is mainly to build stronger political and business ties with Donald Trump and his family.
  • It is widely seen as trying to get closer to the possible next US government under Trump.
  • Bilal Saqib said Pakistan was inspired by the US in this crypto move.
  • Trump, despite earlier criticizing cryptocurrencies, has recently supported the idea of a US Strategic Bitcoin Reserve.
  • The US under Trump had recently announced a plan to create its own Strategic Bitcoin Reserve in March 2025.
  • Pakistan is following this idea, copying the US playbook.

STEPS BY PAKISTAN TO SUPPORT CRYPTO

Pakistan has taken several other steps to support crypto:

  • Partnering with World Liberty Financial, a crypto company linked to the Trump family, to promote blockchain technology.
  • Planning to allocate 2000 megawatts of electricity specifically for Bitcoin mining, which is an energy-heavy process.
  • Declaring that Pakistan will hold onto Bitcoin in a national wallet long-term and will not sell it anytime soon.

THE GEOPOLITICAL ANGLE

  • Pakistan’s crypto activities may be connected to broader political goals, including influencing US statements on India-Pakistan peace talks.
  • Trump claimed that he helped broker a ceasefire between India and Pakistan after a terrorist attack in Kashmir in April 2025.
  • Pakistan supported Trump’s version, but India denied any US role.
  • Experts say that Pakistan’s crypto move is not about economic benefits, but about politics — specifically, gaining favor with the Trump administration.
  • Hussain Nadeem, a Pakistani policy expert, points out that Pakistan’s government often controls the internet and social media tightly, which goes against the open and decentralized nature of cryptocurrencies.
  • Nadeem argues that Pakistan’s ruling elite is only interested in crypto to get access to the Trump White House, not to help ordinary people or improve the economy.

CONCERNS ABOUT TERROR FINANCING

  • Pakistan’s history of terror financing and being on the FATF grey list (2018-2022) raises worries about how crypto could be misused.
  • Cryptocurrencies like Bitcoin are:
    • Borderless and decentralized, meaning no central authority controls them and they can easily be used to transfer money across countries without banks.
    • Offer some level of anonymity or pseudonymity, making it hard to trace the real owners behind transactions.
  • Because of these features, crypto can be exploited to fund terrorism, move money through fake NGOs, or operate via the dark web.
  • Experts fear that terror groups, such as those led by Hafiz Saeed or Masood Azhar, could use Bitcoin for secret money transfers, especially during religious festivals when monitoring might be weaker.
  • There is concern that the Bitcoin reserve meant for “strategic” purposes might be diverted to finance terrorist activities.

INTERNATIONAL SCRUTINY & INDIA’S POSITION

  • Pakistan was on the FATF grey list due to weak anti-money laundering (AML) and anti-terror financing (CFT) systems but was removed in 2022.
  • However, doubts remain about its financial transparency.
  • India is expected to raise concerns at international forums, calling for strict monitoring of Pakistan’s crypto transactions.
  • India argues that Pakistan’s crypto use should be watched as closely as its banking system because of the risks involved.
  • The connection between Pakistan’s crypto push and Trump’s peace claims has raised suspicion that Pakistan’s crypto policy is mainly a political move for international influence, not a genuine step toward technological progress.

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