THE government must check its enthusiasm. The speed with which it is moving on cryptocurrency adoption has created a sharp disconnect between existing state-level policies on crypto assets and recent plans unveiled by the Pakistan Crypto Council, under which the country not only intends to create its own ‘strategic reserve’ of cryptocurrency, but also to allocate two gigawatts of electricity to AI and cryptocurrency businesses. The National Assembly’s Standing Committee on Finance and Revenue was last Thursday informed that, regardless of whatever Pakistan’s new ‘crypto czar’ may have announced with respect to the aforementioned plans just a day earlier at a high-powered forum in Las Vegas, bitcoin and all other cryptocurrencies remain banned and illegal to trade in in Pakistan, and those engaging in cryptocurrency transactions were still being referred to the authorities for prosecution. The revelation once again threw into sharp relief the confusion surrounding the government’s efforts to ‘mainstream’ cryptocurrency adoption.

Several questions have arisen since then. If the State Bank does not recognise cryptocurrencies as legal tender under any circumstances, how can the government use them to create a strategic reserve? Similarly, how has the government rationalised allocating national resources, for example, part of its power output, to businesses that engage in activities that are technically illegal? Furthermore, why is the government entitled to deal in cryptocurrencies when the Financial Monitoring Unit, a government intelligence department that tracks financial crimes, refers citizens dealing in crypto assets to law-enforcement agencies for legal action? There should have been answers to these questions by now in the form of various policy tweaks, but though the Pakistan Crypto Council earlier assumed responsibility for these, it still has nothing to show. In fact, it has only announced a high-level meeting on policy measures for tomorrow following public criticism of its disjointed strategy.

There is understandable scepticism about the use of a highly volatile and speculative class of asset when it comes to investing public resources. Cryptocurrencies are, no doubt, quite risky to deal with, and public funds are normally invested in stable and safe assets for good reason. At the same time, however, there is no denying that cryptocurrencies are rapidly emerging as an important technological innovation in our fast-evolving world, and there is a chance, however small it seems at the moment, that Pakistan could reap windfall dividends if it was able to position itself as a major player in the crypto world. There is no harm in attempting to do so. But since public resources will be at stake, the Pakistan Crypto Council must satisfy the critics with coherent policies to support its plans. Right now, the bombastic approach it has adopted is undermining its efforts. It must temper its zeal and focus on the homework.

Published in Dawn, June 1st, 2025