Ghulam Ahmed, 38, takes a break from his bitcoin consulting company once a week to join a WhatsApp group with hundreds of thousands of people interested in learning how and when to mine and sell cryptocurrencies in Pakistan.
Many people, from housewives seeking a side hustle to wealthy investors hoping to invest in crypto mining hardware, have little understanding of traditional stock markets but are hungry to profit.
“When I open the session for inquiries, there’s a rush of messages, and I spend hours answering them and teaching them basic things about cryptocurrencies,” explained Ahmed, 38, who resigned his position in 2014 because he believed mining Bitcoin would be more lucrative.
Thousands of hits of relevant videos on social media and transactions on online exchanges have fueled a surge in cryptocurrency trading and mining in Pakistan.
Although cryptocurrency is not banned in Pakistan, the Financial Action Task Force (FATF), a worldwide money-laundering regulator, has called on the government to effectively manage the business. Pakistan is already on the FATF’s grey list of nations under surveillance for failure to protect terrorist funding and financial fraud.
The federal government has responded by forming a group to investigate cryptocurrency legislation, that comprises FATF monitors, national assembly, and leaders of the nation’s intelligence services.
“Half the committee members had no clue what it was and didn’t want to understand it,” claimed Ali Farid Khwaja, a partner at Oxford Frontier Capital and chairman of KASB Securities, a stock brokerage in Karachi. “But the good thing is someone set up this committee. The relevant bodies in the government who need to get things done are supporting it, and the promising thing is nobody wants to stand in the way of technical innovation.”
Reza Baqir, the president of the country’s central bank, stated in April that the authority was looking into cryptocurrency and its possibilities for putting apart operations into a legal regime. He told CNN, “We hope to be able to make some announcement on that in the coming months.” Baqir refused to comment on the issue.
Even the educational sector is on board – The Lahore University of Management Sciences, one of the country’s premier universities, won a $4.1 million grant through Stacks, a blockchain network that links Bitcoin to applications and smart contracts, in February to investigate the technology.
For bitcoin supporters, these steps can’t come fast enough.
Authorities have viewed people involved in cryptocurrency trading with mistrust in the past, fearful of suspected links to financial fraud.
Ahmed claims the Federal Investigation Agency (FIA) has detained him twice and accused him of financial and computer fraud, although the allegations have never been conclusively proven.
The FIA confiscated a bitcoin mining farm that he had set up in Shangla, Pakistan’s northern Khyber-Pakhtunkhwa region, that operated by its own hydroelectric power on one occasion, he said. The FIA did not reply any further.
Waqar Zaka, a former TV personality with over a million Youtube subscribers, has been pressing officials for years to not just regulate but also attract more investment. Zaka, like Ahmed, had put up a hydroelectric-powered bitcoin mining farm.
Now, the provincial administration of Khyber-Pakhtunkhwa has appointed Zaka and Ahmed to a commission examining how the province might profit from such initiatives. The group said in March that it was researching into establishing other mining farms utilizing Zaka’s facility as a model.
Despite the difficulties, Pakistan’s cryptocurrency growth is showing no signs of slowing down.
There are a plethora of Pakistan-based social media outlets teaching how and when to exchange and mine cryptocurrencies, some with tens of thousands of Facebook fans. Tens of millions of people have seen bitcoin videos in Urdu on YouTube.
Hundreds of Pakistani merchants are listed on digital cryptocurrency exchanges, most of which are situated outside of Pakistan, such as Localbitcoins.com, which has thousands of transactions.
“You can’t stop crypto,” Ahmed says, adding that the sooner Pakistan regulates and joins the rest of the world, the better.