Panel Explores Cryptocurrency Opportunities for Pakistan
By Elaine Pasquinini
Washington: On December 13, the Atlantic Council’s South Asia Center hosted a lively discussion on the potential opportunities for crypto and blockchain in Pakistan.
“Everyone’s been talking about Bitcoin for a very long time, but during the pandemic so much of this has taken off,” said Atlantic Council nonresident senior fellow Kalsoom Lakhani, moderator of the discussion. “Recently, cryptocurrency exceeded $2 trillion in market capitalization, so it’s safe to say that this is not going away. What we are experiencing today is the future.”
Although presently there are regulatory barriers in Pakistan, there are “an enormous number of users in Pakistan investing in crypto, engaging in the blockchain, people who are really interested in this space,” she added.
Globally, “regulations have been slow to catch up with this space, but some countries are more friendly than others,” Lakhani continued. And “while crypto is not technically banned in Pakistan, you cannot use it as a means of payment, so it is difficult for you to buy crypto with your credit card.”
“I connected the dots on Bitcoin early,” said Salahuddin Khawaja, who had a 20-year career on Wall Street and is now CEO of Decklaration and lives in Pakistan. “In 2014, I started investing in Bitcoin and shortly thereafter in Ethereum. I kind of rode the wave initially.”
After leaving Wall Street, Khawaja said he delved deeper into crypto and its potential and concluded “the next 20 years are going to be all about crypto projects.”
Based on conservative estimates, Khawaja predicted the cryptocurrency industry will grow to $42 trillion dollars over the next ten years and advised people “to buy some Bitcoin and get started.” After talking to people across a broad spectrum of stratum in Pakistan, he said he found much interest.
One benefit of crypto for Pakistanis, he said, is it speeds up the sending of remittances from Pakistanis living abroad who send money back to their families in Pakistan.
On the subject of regulation, Khawaja believes smart regulation is necessary and it “legitimizes the space.”
Omer Suleman, co-founder of Westridge Markets, a proprietary trading and investment firm which is focused on the crypto ecosystem, describes himself as a “serial entrepreneur in the cryptospace.” Also coming from a career on Wall Street where he traded financial derivatives, he was attracted to the volatility in the crypto area in a trading sense.
“We should understand that realistically we are very early in this journey,” Suleman said. “Most people who will purchase crypto…have no real understanding of what it is. It’s just the access to an investment possibility which is clearly open, clearly very inclusive.”
Suleman admitted that crptocurrency is a difficult space for non-specialists to understand, including regulators and the people in charge, adding that most Western countries regulate crypto as a commodity.
“There is nothing more important than to remove the stigma from crypto and blockchain,” Suleman said. “You need to honor the entrepreneurs who are actually thinking about this stuff at this time early on, that are doing things that are new, whether it is on university campuses or young entrepreneurs’ startups.”
“This is one of the best times in the recent past to be an entrepreneur, to be a founder, to be a builder in this space,” Suleman continued. “There is capital available for smart builders, so I would say get your hands in the eco system, build out and lots of capital will follow you.”
Ali Farid Khwaja of KTrade Securities, a stock brokerage and financial services company in Pakistan, said his journey with blockchain and Bitcoin started in 2013 when he wrote a report on the cryptocurrency. “At that time accepting Bitcoin was not common,” he acknowledged.
But now, things have changed, Khwaja said. “Everybody is investing in crypto in Pakistan. We come across them all of the time…rich people, the normal guy, shopkeepers and students.”
In his discussions with potential investors, no one wanted to talk about stocks, he related. “They would want to talk about politics – how bad that is – or talk about crypto and which is the best crypto coin to buy.”
Khwaja estimated some 15 to 20 million people in Pakistan are investing in crypto through various platforms. And if you consider rising inflation and the deterioration of the rupee, “people think that this is one way that they can become rich,” he said.
Looking into the future, Khwaja predicted Bitcoin will become the primary source of currency and even governments will allocate their reserves to it. “The best way to learn is to just start doing it,” he said.
(Elaine Pasquini is a freelance journalist. Her reports appear in the Washington Report on Middle East Affairs and Nuze.Ink.)
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