India - Pakistan: The Cryptocurrency Challenge
STORIES, ANALYSES, EXPERT VIEWS
A fast-rising crypto evangelist: Bilal Bin Saqib, could help transform Pakistan’s image from perennial third world basket case and terrorism-linked state to global financial hub. This is the speculative view of Paran Balakrishnan (journalist, The Hindu Business Line; Deputy Editor, The Telegraph; New Delhi Business and Finance).
The UK-based entrepreneur is the Pakistan prime minister’s advisor on cryptocurrency and blockchain. He’s been globetrotting, making high-level connections and pitching Pakistan as a promising destination for anyone hoping to make a quick fortune in the digital finance world.
The proposition might sound improbable today. “But while India cautiously toes the regulatory line on digital finance, Pakistan is staging a bold comeback not with tanks or trade, but with cryptocurrency, as it seeks favour with the Donald Trump White House.”
‘Pakistan’s crypto push has already opened up many doors in Washington,’ says Michael Kugelman, senior fellow, Asia Pacific Foundation. ‘Consider that until Trump hosted Pakistan’s army chief, the only known visiting senior Pakistani official to get a White House meeting during Trump’s second term was Saqib. He met one of Trump’s top crypto officials.’
Saqib’s ambitious vision and the Trump factor: Saqib laid out his ambitious vision at the Bitcoin Conference in Las Vegas at the end of May, a gathering of 35,000 crypto devotees. ‘He announced plans to create a Strategic Cryptocurrency Reserve, a sovereign fund designed to stabilise Pakistan’s cryptocurrency ecosystem.
Kugelman observes, ‘Islamabad has come out of the gate with a savvy strategy, one that taps into the administration’s strong interest in crypto. This means that, at least initially, the Trump administration appears inclined to give Pakistan a closer look than many observers might have expected.’
Cryptocurrency has entered a new boom phase since Trump’s return to the Oval Office in January. One Bitcoin, valued at $64,000 in June 2024, has now surged past $108,000.
‘Pakistan’s crypto push has seemingly come out of nowhere,’ Kugelman notes. 'It had practically no crypto focus at all until Trump returned to power. And then suddenly it had a new crypto council in place with massive buy-in from the highest levels of power, including Field Marshal Munir.’
Pakistan also lobbying Washington to invest in its rare earths: Crypto isn’t the only prize Pakistan is using to court Trump’s circle writes Balakrishnan. “It’s also lobbying Washington to invest in its rare earths, especially in its insurgency-hit western provinces. The US is said to be particularly interested in antimony, a mineral used in flame retardants and electric batteries. Pakistan has even offered to nominate Trump for the Nobel Peace Prize.”
Pakistan focussing on issues Trump feels the most strongly about: Kugelman suggests it’s part of a broader strategy: ‘Pakistan deserves to be applauded for honing in on those issues that Trump feels the most strongly about — crypto, critical minerals, counterterrorism — and pitching Pakistan as a critical partner on all of this. It’s an effective approach, given that a transactional administration won’t be swayed by boasts about more strategic considerations.’
India shouldn’t overreact
Kugelman thinks India shouldn’t overreact. ‘India may be best simply shrugging this off as Pakistan’s comparative advantage with the US, and focus on its own areas of strength with Washington — strengths that at the end of the day far exceed those of Pakistan.’
Right now, writes writes Balakrishnan “India is playing it safe. Crypto is legal to buy, sell, and trade but not to use as payment. The Reserve Bank of India remains cautious, and a discussion paper on proposed legislation is expected soon.”
In the end, “Pakistan’s bid to rebrand itself as a cutting-edge crypto hub may still be a long shot. But with Saqib cultivating the Trump administration and digital finance gathering momentum globally, India may soon face a choice: whether to remain a cautious observer — or to step up its own game…..”
