Pakistan sets up new authority for 'crypto' oversight
Pakistan has unveiled a new regulatory body to oversee the digital asset sector as adoption in the South Asian nation skyrockets.
Known as the Pakistan Digital Asset Authority (PDAA), the new watchdog has received the endorsement of the Finance Ministry. Minister Muhammad Aurangzeb recently said that PDAA will ensure Pakistan remains Financial Action Task Force (FATF) compliant and promote responsible digital asset use.
'Pakistan must regulate not just to catch up — but to lead,' the minister stated, as reported by national broadcaster PTV.
'With the PDAA, we are creating a future-ready framework that protects consumers, invites global investment, and puts Pakistan at the forefront of financial innovation.'
The new authority will oversee all licensing of virtual asset service providers (VASPs), including exchanges, wallets, custodians, and brokerages. It will also have jurisdiction over decentralized finance (DeFi) platforms, tokenization firms, and stablecoin issuers.
Beyond oversight, the authority will promote the development of 'blockchain-based solutions at scale.' Pakistan has embraced the technology for years, with former President Arif Alvi enlisting the assistance of leading experts, including the BSV Association, to draft a national blockchain strategy.
The PDAA will also provide legal clarity to digital asset investors and channel Pakistan's excess electricity to block reward mining. Last month, the government revealed that it would begin using surplus power to mine digital assets at a time when demand for electricity from the national grid has dipped drastically.
The authority will also support tokenizing government debt and national assets, PTV reports. With tokenization taking off globally, the Pakistani government set aside $3.5 billion in March to fund the sector. Experts predict that tokenized assets could unlock $18.9 trillion by 2033.
Pakistan's deep dive into digital assets
The PDAA is the latest initiative by the Pakistani government to promote digital assets and blockchain adoption. In March, it established the Pakistan Crypto Council (PCC), whose mandate is to promote the adoption of digital assets in the country and aid in formulating enabling laws.
The Council's CEO, Bilal Bin Saqib, welcomed the new watchdog, which he says will augment the PCC's efforts in promoting the sector and is a stride toward 'strong and smart regulations.' 'This is not just about crypto — it's about rewriting our financial future, expanding access, and creating new export channels through tokenization, digital finance, and Web3 innovation,' he stated.
The two agencies—both chaired by Minister Aurangzeb—have overlapping duties, such as promoting adoption. However, the Council serves more as an advisory body that shapes policy and industry collaboration, while the newly formed PDAA will have direct legal enforcement powers.
Saqib, who chairs the Council, is focused on making Pakistan a Web3 hub, even with the formation of the new watchdog.
'For the first time, we are not standing behind the world, but we are establishing our own trend in the digital currency landscape. Global tech leaders and companies are now looking toward Pakistan to explore its crypto potential,' he told local outlet Dawn.
With its focus on boosting Web3 and new laws on digital assets, Pakistan is ensuring 'that global-level companies can now be built in Pakistan, not just in the U.S. or Europe.'
Pakistan dedicates 2,000 MW to 'crypto' mining, AI
In yet another stride towards promoting digital assets in the country, the Pakistani government has allocated 2,000 megawatts (MW) of electricity to block reward mining and artificial intelligence (AI) data centers.
The initiative is led by the PCC and will mainly depend on excess power. The Pakistani economy has faltered in recent years and almost defaulted in 2023. It has been especially brutal to small and medium enterprises (SMEs), which employ the bulk of the country's workforce, leading to lower electricity demand and a switch to cheaper alternatives like solar energy.
Besides the surplus power, the government intends to repurpose some of the country's coal-based power stations, which have been operating below capacity for years.
Currently, Pakistan's contribution to the global BTC hash rate is negligible, with regional peers like Thailand, India, and Iran playing a bigger role. However, if all 2,000 MW goes to block reward mining with the latest ASIC miners, it could contribute over 60 exahashes per second (EH/s), making it one of the top five mining hubs.
Watch: It's time for regulation to enable blockchain growth
title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Coin Geek
4 hours ago
- Coin Geek
El Salvador approves investment banks holding digital assets
Getting your Trinity Audio player ready... The El Salvador legislative assembly has approved a law that will let large financial institutions register as investment banks and offer financial services in digital assets to 'sophisticated investors.' The Investment Banking Law was approved on August 7 by El Salvador's Legislative Assembly members, with 55 out of 60 deputies voting in favor. The law distinguishes investment banks from commercial banks and allows financial institutions with at least $50 million in capital to qualify as investment banks. According to a legislative assembly press release, these investment banks can target so-called 'sophisticated investors,' individuals or entities with 'extensive knowledge, financial capacity, and experience in managing complex investments, with assets equal to or greater than $250,000 in liquid assets.' These liquid assets include treasury bonds, tokenized treasury bonds, tokenized gold, and digital assets such as Bitcoin. El Salvador has pitched itself as a 'crypto' haven ever since President Nayib Bukele came into office in 2021. The country already allows firms to register as Bitcoin service providers, digital asset service providers, or digital asset issuers, but the new regulation allows investment banks, once authorized by the competent authorities, to also act in those capacities. 'One of the main innovations introduced by the Investment Banking Law is the incorporation of operations with Bitcoin and digital assets into the regulatory framework of the Salvadoran financial system,' said the announcement. According to the legislative assembly, investment banks will be allowed to carry out active and passive operations, such as opening and maintaining current and term accounts, receiving deposits, and making payments through payment networks—in both fiat currency and digital assets. 'El Salvador will benefit in five strategic areas: first, the attraction of international private capital. This will allow investment funds and high-net-worth individuals to establish themselves in the country or use our entities as platforms for regional operations,' said legislative assembly deputy Dania González. 'Another benefit is the financing of the financial system, since the institutional architecture of the Salvadoran financial system will be expanded as a new, but regulated and supervised, entity, complementary to the traditional banking system we are all familiar with.' González emphasized that the regulatory framework will allow a deeper dive into the capital and digital asset markets, opening up secure and regular modern operations such as Bitcoin, stablecoins, tokenized gold, and other digital instruments. Oversight and enforcement The Central Reserve Bank (BCR) and the Superintendency of the Financial System will be responsible for ensuring compliance with the new regulations. The government press release stated that the BCR must 'issue regulations defining capital, liquidity, and risk management requirements, establish criteria for asset valuation, regulate mechanisms for operating with digital assets, and determine the levels and use of the liquidity reserve required of these entities.' Meanwhile, the Superintendency will be charged with direct supervision of investment banks, including authorizing their creation, merger, or closure, and supervising their operations to ensure compliance with prudential laws and regulations. The two regulators will also update the minimum financial requirements for 'sophisticated investors' and qualifying entities every two years. Bukele's BTC paradise hasn't hit home The new law's focus on large companies and wealthy investors appears to make sense in the light of indications that President Bukele's attempt to foist BTC on the population has largely failed. In 2021, El Salvador passed a law designating BTC as a legal tender, requiring retailers to accept it as payment for goods and services. However, by 2024, BTC-based remittances accounted for just $28.8 million, barely 1%, of the total $2.64 billion remitted in the first four months of the year. By October 2024, a San Salvador University survey found that 92% of 1,224 respondents weren't using BTC to make transactions. The icing on the cake came in December 2024, when El Salvador was effectively forced to roll back on its BTC commitments by the International Monetary Fund (IMF), as part of the organization's demands if it agreed to a US$1.4 loan for the country, which it eventually did in February 2025. The country has since halted using public funds to further stockpile BTC. Most recently, in July, one crypto advocate group expressed disappointment that El Salvador's BTC reserve has had limited impact on the population at large, and that the country's loan agreement with the IMF may further hamper its BTC goals. Thus, with the general population less than enthusiastic about digital currency and the IMF hamstringing government investment in the area, it appears Bukele has now turned to wealthy investors and financial institutions, in the hope that encouraging their investments in digital assets can keep his dream of a BTC utopia alive. Watch: Blockchain and banking title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen=""> Banks Dania González El Salvador Investment Banking Law Nayib Bukele Regulation
Finextra
20 hours ago
- Finextra
Raast and Pakistan's Digital Economy: How Instant Payments Are Reshaping the Nation's Financial Futu: By Muhammad Qasim
Pakistan's financial sector is in the middle of a transformation — one that is changing how money moves, how businesses operate, and how people interact with the economy. At the heart of this transformation is Raast, the State Bank of Pakistan's (SBP) instant, low-cost, and secure digital payment system. Launched with the goal of improving financial inclusion and reducing reliance on cash, Raast is not just a payment method; it's a game-changer for the country's digital economy. From street vendors to freelancers, from small retail shops to large corporations, and from government institutions to ordinary citizens — Raast is making transactions faster, cheaper, and more transparent. In this article, we'll explore what Raast is, how it works, its adoption trends, the explosive growth in transaction volumes, and how it is reshaping Pakistan's digital economy. What is Raast? Raast — meaning 'direct' or 'straight path' in Urdu — is Pakistan's first real-time payment system designed to provide instant, low-cost, and secure money transfers between individuals, businesses, and government entities. Unlike traditional bank transfers that can take hours (or even days), Raast processes payments in seconds, 24/7, across all participating banks and digital wallets. Key Features of Raast Instant transfers — Payments clear in real time, any time of day. Low or zero fees — Most banks offer Raast transfers free of charge. Mobile number–based transfers — Send and receive money without sharing long account numbers. Secure SBP infrastructure — Fully regulated and backed by the central bank. Supports bulk payments — Ideal for salaries, pensions, and government subsidies. Raast's Role in Pakistan's Digital Transformation Before Raast, Pakistan's payment systems were fragmented, with slow transfers and limited interoperability between banks. Digital transactions existed, but they were often expensive, unreliable, and inaccessible to rural populations. Raast has bridged this gap by: Encouraging cashless transactions — Reducing reliance on physical currency. Boosting financial inclusion — Extending access to millions without prior exposure to banking. Connecting e-commerce and gig economy platforms — Supporting instant settlements for small sellers and freelancers. Facilitating transparent government payments — Reducing corruption and leakage in welfare programs. Transaction Volumes: The Scale of Raast's Impact The success of Raast can be measured not only in adoption rates but also in the massive transaction volumes it processes. Latest Transaction Data According to the SBP's Q3 FY 2024–25 payment system statistics: Raast processed 371 million transactions worth PKR 8.5 trillion in just one quarter. Since launch, it has handled 1.5 billion transactions with a cumulative value exceeding PKR 34 trillion . Digital channels now account for 89% of all retail transactions by volume in Pakistan. Mobile banking, branchless wallets, and e-money accounts processed 1.686 billion transactions worth PKR 27 trillion in the same quarter. This exponential growth shows how deeply Raast is embedding itself into Pakistan's financial DNA. How Raast is Reshaping the Digital Economy 1. Fueling Financial Inclusion Raast has given millions of Pakistanis access to formal banking for the first time. Rural populations can now send and receive money instantly using just a phone. Microfinance institutions integrate with Raast, expanding their reach. Women and marginalized groups can transact without visiting physical bank branches. 2. Boosting Small Businesses and E-Commerce The e-commerce industry in Pakistan has grown rapidly, but one challenge was slow and expensive payment settlements. Raast changes this by: Allowing instant settlements for online vendors. Reducing the need for cash-on-delivery (COD), which previously accounted for 60–70% of e-commerce payments. Helping micro-merchants avoid costly point-of-sale infrastructure. 3. Empowering Freelancers and the Gig Economy Pakistan is among the top countries for freelance work, with millions earning online. Raast supports these workers by: Providing quick local payment settlements. Reducing transfer costs from local platforms. Enabling platforms to pay thousands of workers simultaneously. 4. Streamlining Government Payments Government agencies and welfare programs use Raast for: Ehsaas program payouts Salary and pension disbursements Subsidy transfers for fuel, food, and utilities By moving these payments to Raast, the government improves speed, reduces leakages, and increases transparency. 5. Reducing Cash Dependency Pakistan's economy has long relied heavily on cash. This creates problems like tax evasion, corruption, and inefficiency. Raast's growing popularity is a direct blow to cash dominance by: Offering a free, fast alternative to cash. Making digital transactions accessible even for low-income groups. Creating a financial trail that strengthens the formal economy. Case Studies: Real-World Impact of Raast Case 1: A Street Vendor in Lahore A chai seller who previously accepted only cash now uses Raast to receive payments directly to his bank account via mobile number. Customers can pay instantly, and he no longer worries about carrying large amounts of cash at night. Case 2: A Karachi-Based E-Commerce Store Before Raast, the store owner relied on COD, which caused delays and cancellations. After integrating Raast payments, settlements are instant, returns are lower, and customer trust has improved. Case 3: Government Subsidy Disbursement A small farmer in Sindh receives fertilizer subsidies via Raast directly into his account, cutting out middlemen and ensuring he gets the full amount. Challenges to Raast's Full Potential While Raast has made great strides, some hurdles remain: Digital Literacy Gaps — Many rural and older populations still need education on how to use Raast safely. Internet & Mobile Coverage — Remote areas lack consistent access to reliable mobile data. Cybersecurity Concerns — As transactions grow, so does the risk of fraud and phishing scams. Resistance to Change — Some people still prefer cash due to habit or distrust in banking. The Road Ahead: Future of Raast and Digital Payments in Pakistan The SBP has ambitious plans to expand Raast's scope: Merchant Payments — Making Raast the default payment method for retail transactions. Cross-Border Transfers — Enabling remittances through Raast in collaboration with global payment systems. QR Code Integration — Allowing small shops to accept payments simply by displaying a QR code. Open API Ecosystem — Encouraging fintech startups to build innovative apps using Raast's infrastructure. If these expansions succeed, Pakistan could see cashless transactions become the norm within a decade, dramatically increasing economic transparency and efficiency. Conclusion Raast is more than just a payment method — it's a pillar of Pakistan's digital transformation. By enabling instant, low-cost, and secure payments, it is helping formalize the economy, support small businesses, empower freelancers, and improve government efficiency. The transaction volume growth — from zero to over 1.5 billion transactions worth PKR 34 trillion in just a few years — is proof of its adoption and potential. With the right infrastructure, education, and security measures, Raast could lead Pakistan into a future where digital finance is not the exception but the default.
Reuters
a day ago
- Reuters
Bank of England trims QE loss estimate to 115 billion pounds
LONDON, Aug 12 (Reuters) - The Bank of England on Tuesday lowered slightly to 115 billion pounds ($155 billion) its estimate of the net loss that Britain's finance ministry will have to pay to cover the central bank's bond-buying programme. When the BoE began quantitative easing in 2009 to boost the economy after the global financial crisis, the finance ministry agreed to cover any losses and take any profits. Gilt purchases ran until late 2021 - after extra rounds to support the economy through the shocks of Brexit and the COVID-19 pandemic - before the BoE put the 875 billion-pound programme into reverse in February, 2022. It is currently running down the stockpile at a pace of 100 billion pounds a year. While Britain's finance ministry made a 124 billion-pound profit from the programme when interest rates were near zero, the BoE now faces heavy losses which are set to reach 30 billion pounds annually in the coming years. The shortfall reflects the fact that BoE interest rates are now higher than the average yield of the bonds it bought, as well as losses which are crystallised when the bonds are sold, as their market value is now lower than what the BoE paid. Politicians, as well as former BoE deputy governors Charlie Bean and Paul Tucker, have criticised how the QE programme has been structured, saying it puts too much of a burden on the already stretched public finances. But BoE Governor Andrew Bailey has said changes would disrupt monetary policy and the cash loss figure ignores the stronger economic growth and lower government borrowing costs brought by QE. The BoE's 115 billion-pound estimate of the net loss, which taxpayers will have to foot, takes into account the 124 billion-pound profit received in the years up to 2022. The projected loss is similar whether the BoE sells bonds at a pace of 100 billion pounds a year or slows to 80 billion pounds, and assumes the BoE continues to cut interest rates - currently 4% - in line with market expectations. A previous estimate made in the central bank's last quarterly report in May showed a 120 billion-pound loss, while a year ago the BoE predicted a loss of 95 billion. The BoE said losses would be much smaller at around 55 billion pounds if interest rates fell to what staff in 2018 judged to be their neutral level of around 2.5%. Markets now see BoE rates bottoming out at around 3.5% next year. ($1 = 0.7428 pounds)
