Donald Trump backs Waqar Zaka’s 2015 bitcoin reserve strategy,
Karachi(Business Reporter);Bitcoin as National Reserve: A Potential Solution for Pakistan’s Debt Crisis?, The concept of nations holding Bitcoin as part of their national reserves has gained significant attention recently, with former US President Donald Trump’s announcement at the Bitcoin Conference in Nashville sparking a global debate. Trump vowed that if re-elected, the federal government would never sell off its Bitcoin holdings, highlighting the potential benefits of cryptocurrency in national finance.
In Pakistan, this announcement has ignited a discussion on the possibility of adopting Bitcoin as a means to manage the country’s debt crisis. Influential voices, such as crypto expert Waqar Zaka, are urging the government to consider Bitcoin as a viable solution to mitigate the debt burden.
Proponents argue that holding Bitcoin in national reserves could provide a hedge against inflation, currency devaluation, and economic uncertainty. With Pakistan’s debt crisis worsening, exploring alternative solutions like Bitcoin could offer a glimmer of hope.
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However, skeptics raise concerns about the volatility of cryptocurrencies, regulatory challenges, and the need for a comprehensive understanding of Bitcoin’s implications on national finance.
As the debate unfolds, Pakistan’s government must carefully weigh the potential benefits and risks of adopting Bitcoin as a national reserve asset.
Demonstrating his commitment, he initiated and successfully argued as his own lawyer in petition CP 7146/2019, leading to a significant December 2020 Sindh High Court observation that the State Bank cannot deem cryptocurrencies illegal.
His persistent efforts culminated in his appointment to Pakistan’s inaugural crypto regulatory body, alongside SECP and the State Bank, reinforcing his visionary stance—echoed recently by former U.S. President Trump at a major Bitcoin conference.
“Pakistan has over 20 million registered crypto accounts, nearly matching the number of traditional bank accounts,” added Waqar.
Crypto-enthusiastic Waqar Zaka went on to say that this high adoption rate indicates a robust interest in digital assets, which could be leveraged to boost the economy.
By SAMA News,
The case for bitcoin as national reserve
The idea of using Bitcoin as a national reserve is not without precedent. India, for instance, has regularized the cryptocurrency industry, imposing a 30% tax on crypto gains, similar to capital gains on shares.
This regulatory approach has created a structured environment for crypto trading and taxation, something Pakistan could learn from. With the Pakistani rupee facing devaluation, Bitcoin could serve as an alternative store of value, providing stability in uncertain economic times.
Proposed solutions
To harness the potential of cryptocurrencies, Pakistan needs to:
- Regulate crypto exchanges: Exchanges must obtain a license from the proposed Pakistan Digital Asset Board (PDAB) to operate. They are required to deposit a non-refundable security of USD 10 million to ensure robust customer protection and operational integrity
- Stablecoin regulations: Operators of stablecoins like USDT and USDC must back their circulating digital assets with an equivalent amount of Pakistani Rupees in national reserves
- Compliance with international standards: All exchanges must adhere to the FATF Travel Rule, with mandatory real-time reporting of any cross-border transactions including comprehensive KYC details of the involved parties
- Crypto mining policies: Cryptocurrency mining is restricted to using hydroelectric power. Utilizing any other power sources for mining is illegal and subject to penalties
- Asset declaration: All entities and individuals must declare their digital assets by registering their wallet addresses on a designated government website. Non-compliance will lead to a non-bailable imprisonment of up to three years
- Educational initiatives and public awareness: The PDAB, in collaboration with PTV (Pakistan Television Corporation), will launch educational programs to provide training on cryptocurrency trading and blockchain technology
Meanwhile, unauthorised transfers of funds outside of Pakistan detected by monitoring systems will result in a penalty of three years in jail. This strict measure is to prevent illegal financial flows and protect national economic interests.
By implementing these measures, Pakistan can create a secure and conducive environment for crypto trading, potentially attracting significant investments and aiding in debt reduction.
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