The Development of Money and Pakistan's Need for Crypto assets and Cryptocurrencies

 

For virtually as long as people, currencies have been demanded in one way or another. Trade has always been possible between parties through the exchange of tangible objects like stones, gold, or tablets. Paper money is thought to have initially been used between the seventh and eleventh centuries BC, according to historians. Since then, money has changed from being paper to plastic to digital.

The popularity of using cash or paper money as a means of exchange is steadily declining. Two-thirds of adults globally now make digital payments, according to World Bank statistics. Contrarily, the use of cash payments is decreasing, but it is still common in low- and some middle-income countries. Today, for instance, only 29% of US consumers prefer cash payments. Additionally, digital assets also referred to as crypto assets, are currently being promoted as the commerce and finance of the future.

When Bitcoin, the first cryptocurrency based on the Blockchain, was created in 2009, everything got started. With a market cap of more over $410 billion as of July 2022, it is now the largest digital asset class. More than 10,000 crypto assets are already traded globally, and their total value peaked at $2.9 trillion in November 2021.

According to Chainalaysis, a top worldwide Blockchain data platform, investors from Pakistan made more than $604 million in earnings from cryptocurrency trading in just 2021. According to the Global Crypto Adoption Index, the nation is also among the top three in terms of crypto investors.

The majority of global trade and currencies are governed by central banks and state-controlled financial institutions. Due to the fact that they are built on a decentralised ledger technology and transactions are not authorised by a single regulatory body, cryptocurrencies are frequently seen as viable substitutes for established institutions. Most financial experts, however, are opposed to wholly unregulated transactional channels.

This is one of the key causes of the ongoing disagreement on whether or not to recognise cryptoassets as legal money. While some countries have outright forbidden the use of these assets, some of the largest economies in the world, such as Canada and Australia, have approved their use. The second largest economy in the world hasn't abandoned blockchain technology, which, with or without cryptocurrency assets, are being heralded as a revolution in fintech, despite this seemingly stern measure.

Some significant questions are raised by the diversity of viewpoints and behaviours that divide nations around the globe. The question of the future prospects of crypto assets both internationally and in Pakistan is the most significant of these.

There is little question that cryptocurrencies and their assets are here to stay. These currencies are bankable for a number of reasons, notwithstanding the market's turbulence. The foundational structure upon which they all rest is the most important of these. Blockchain technology is a ground-breaking innovation that makes international transactions simple and safe. The fact that numerous nations have effectively regulated crypto assets serves as sufficient evidence of the viability of this transactional method.

Despite being one of the largest crypto markets, Pakistan has made only modest strides in the direction of regulating these virtual currencies. It is clear that the nation is passing up a big chance to join the league of developed nations that actively pursue ground-breaking technological developments.

To take advantage of the profitable opportunity given by the millions of current cryptocurrency investors and a further potential base that is prepared to use digital currencies as means of trade and investment, corrective and quick action is desperately needed on this front. There are many benefits to be gained from this market, including tax benefits to the national exchequer and a boost for the nation's efforts to promote financial inclusion, but only if the authorities can take prompt action at this crucial time.