The current uproar over crypto currency in Pakistan seems no less than a story of economic terror. On one hand, the entire country is struggling with historic inflation, dwindling foreign exchange reserves and uncontrolled economy, while on the other hand, common Pakistani citizens are looking for some support to save their savings from sinking. Crypto currency has filled this void. But this has become the biggest headache for the government and the State Bank. After all, how did this chaos become so big and what is going on inside the neighboring country…

Why did the common Pakistani run towards crypto?

It starts with the deteriorating economy of Pakistan. The Pakistani rupee has continuously weakened in the last few years. The inflation rate has crossed 30 percent several times. When this is the condition of a country’s currency, it is natural for people to lose confidence in it. People want their savings to be kept in a safe place, but keeping money in Pakistani banks means its value continuously falling according to inflation.

According to Pakistani media Dawn, investing in real estate or gold in Pakistan is not for everyone. In such a situation, crypto, especially stable coins like Bitcoin and USDT (Tether), have emerged as an alternative safe haven. Pakistan has consistently been included in the top-10 countries in Chainalysis’ ‘Global Crypto Adoption Index’ report. This shows how fast common Pakistanis are adopting crypto.

Why did crypto currency become an thorn in the eye of the government?

The stance of State Bank of Pakistan (SBP) is very strict. SBP has repeatedly said that no crypto currency has been given legal recognition in Pakistan. But just saying it doesn’t help. In fact, crypto has become a major source of ‘black money’ for the government of Pakistan. Pakistan is currently in talks with the IMF for another bailout package. IMF has already made it clear that Pakistan will have to bring transparency in its financial transactions and curb money laundering and terrorism financing.

According to the report of Arab News, the entire structure of crypto is decentralization, meaning neither the government has control over it nor its transactions can be easily tracked. This makes it difficult for the government to collect taxes and a large part of the foreign exchange starts going out through unregulated channels. According to Pakistani media, every year crypto currency worth billions of dollars is bought and sold in Pakistan through P2P (Peer-to-Peer) platforms, over which the government has no control.

How did the crypto uproar spark?

According to Dr. Rajan Kumar, foreign affairs expert and JNU professor, there are 3 recent and concrete incidents behind the uproar over crypto in Pakistan at the beginning of this year:

• Repressive actions and arrests: Pakistan’s Federal Investigation Agency (FIA) started massive raids a few months ago. People running crypto exchanges were arrested in many cities. He was accused of sending dollars out of the country illegally. This was no small action, it shook the entire crypto community.
• Digital Frauds and Scams: The biggest problem with crypto in Pakistan is lack of awareness. In 2025, many such online platforms were caught in big cities like Karachi and Lahore which made away with crores of rupees by luring people of huge profits in crypto. These scams cost the common people crores of rupees and led to protests on the streets. This gave the government an opportunity to take a more strict stance against crypto.
• Power crisis and crypto mining: Pakistan is already facing severe shortage of electricity. Meanwhile, the government claimed that illegal crypto mining farms are running on a large scale in many parts of the country including Khyber Pakhtunkhwa and Balochistan. They are being run by stealing electricity. After this, the administration seized a large number of mining machines and disconnected the connections. This gave rise to a new type of economic crime.

So is the crypto game over in Pakistan?

it’s not like that at all. No matter how much uproar there is, the ground reality is that there has been no break in the pace of crypto in Pakistan. The reason for this is the crisis of trust. People neither trust government policies nor the traditional banking system. Even after the action of FIA, people are doing crypto transactions underground through P2P networks and WhatsApp-Telegram groups.

Experts say that the Pakistani government itself is in a dilemma. She knows that it is impossible to ban it completely. Therefore, there are reports that the Pakistan government is now trying to bring a regulatory framework on the lines of Singapore and Dubai. With this, crypto will be brought under legal ambit and tax will be collected on it.

The current tussle that is going on tells the story of a country where crypto currency has become a battlefield between the weakness of the state and the helplessness of the people. This uproar is not showing any signs of stopping.

Pakistan is currently facing serious economic challenges. Inflation is increasing in the country, debt burden is continuously increasing and a large number of people are struggling with financial problems. Meanwhile, the Pakistan government has signed a big lobbying deal to improve its image in America and advance its strategic interests.

According to the information received, Pakistan has made a lobbying deal worth 1.3 million dollars i.e. approximately Rs 11 crore in the US capital Washington. The objective of this agreement is said to be to strengthen Pakistan’s image in America and to effectively present its stand in American policies related to South Asia.

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Pakistan Embassy signed an agreement

Pakistan Embassy in Washington has signed this agreement with Irwin Graves Strategy Group LLC on May 1 for two years. During this period, the lobbying firm will maintain contacts with US policy makers, key committees of Congress, influential organizations, experts and investors on behalf of Pakistan. Through this campaign, Pakistan wants to present itself as an important partner in regional stability and anti-terrorism efforts. Apart from this, it will also try to attract investment from America in the areas of mineral resources, information technology (IT), pharmaceutical industry, agriculture and infrastructure. However, many experts believe that it will not be easy for Pakistan to improve its international image. The reason for this is that the country has been facing international criticism for a long time regarding issues related to human rights.

Many serious allegations against Pakistan

Allegations of forced disappearance of people, action by security forces and human rights violations have been continuously raised against Pakistan in Balochistan. Human rights organizations have repeatedly expressed concern over alleged extrajudicial killings, restrictions on freedom of expression, and the use of anti-terrorism laws against dissent in Balochistan. Washington-based analyst and geo-politics expert Surinder Zurahi says that such issues affect Pakistan’s image in western countries. According to him, policy makers of America and other western countries constantly keep an eye on Pakistan’s position on issues of democracy, financial support to terrorism, minority rights and human rights.

Status of religious minorities in Pakistan
The status of religious minorities in Pakistan has also often been a topic of discussion. Allegations of discrimination, forced conversion and misuse of blasphemy laws against Hindu, Christian and Ahmadiyya communities have surfaced from time to time. In such a situation, amidst economic crisis and domestic challenges, this step of Pakistan has become a topic of discussion. On one hand, a large population of the country is facing inflation and economic difficulties, while on the other hand, the government is spending crores of rupees to improve its image at the international level.

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Pakistan seems to be stuck in a bad phase of economic recession. It is facing a serious food crisis due to rising prices, which is due to the increasing gap between demand and supply of essential commodities. This has come to light in a new report. According to a report by Directus.gr, the prices of wheat, the primary source of food and nutrition for most of the population, have seen a 30-50 percent increase in just one month.

According to the report, ‘This has further increased the difficulties of the common people in Pakistan, who were already affected by the rising cost of living and the economic instability of the country. In September 2025, the Consumer Price Index (CPI) saw an increase of 5.6 percent on a year-on-year basis. Rising food inflation has led to reduction in consumption of meat and expensive items like tomatoes. People have expressed anger over the government’s failure to control food inflation, which has made their livelihood difficult.

State Bank of Pakistan’s estimate failed

Experts estimate that the overall inflation figures will be higher than the estimates of the Islamabad government and the State Bank of Pakistan (SBP). It is noteworthy that Pakistan Finance Minister Mohammad Aurangzeb had said that the government is committed to price stability. However, the report said that people claimed that the government measures were only symbolic, which did not stop overcharging.

Pakistan’s economy affected by devastating floods

The Islamabad government has also blamed the floods for low agricultural production and skyrocketing prices of food items. According to experts, food inflation is likely to remain high due to floods and supply chain disruptions. Pakistan’s economy has been hit by devastating floods, which has affected agricultural production and rekindled inflationary pressures. The World Bank has projected only 2.6 percent GDP growth for Pakistan in 2025-26.

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