CRYPTO'S -STUDENTS- CRAYONS : CASE STUDY ESSAY

ON THE WORLD STUDENTS SOCIETY - Esteemed Founder Framer Engineer Syed Hussain Ali [ NUST] - works on and talks affectionately about Crypto and global Exchanges.

And typically of me, I keep reminding him that The Pakistan Virtual Asset Regulatory Authority has invited Expressions of Interest [ EoIs] from leading global exchanges and Virtual Asset Service Providers [VASPs].

But the state-of-the-world's affairs, tosses the Global Founder Framers of !WOW! on different shores.

FOR ASIA - even Far East, the Crypto researchers of The World Students Society will have to step back and understand the philosophy and practice of Hawala. Because most easily - Crypto could serve as  Hawala's alternative.

'' Cryptocurrencies flourish because they leave no trail. A currency born unregulated cannot be regulated, '' argued Pakistan's former Federal Board of Revenue chairman and economist Shabbar Zaidi.

While the US market has seen widespread adoption, he noted, the difference lies in the freer foreign exchange regime. In Pakistan, or for that matter in any struggling or developing economy, commercial  banks cannot buy and sell dollars without the State Bank's permission.

Trust and acceptance : Mr. Zaidi estimated that around 9 million Pakistanis hold or trade virtual currencies, primarily Bitcoin, a decentralized digital asset where transactions are recorded on a blockchain and issuance is independent of any central bank.

He added that digital currencies are already being used to settle transactions, including  under-invoicing in trade with China, in ways similar to the hawala system :

'' This is not about being too fast or too slow in adoption. The reality is that our system cannot regulate it,'' he said.

He emphasised that all currencies are built on trust, pointing to the US dollar today and the British pound in the past. Similarly, a trusted digital currency could emerge as a medium of payment worldwide.

He suggested that asset-backed cryptocurrencies could, in theory, be issued, but demand would remain weak, since unregulated digital assets allow holders to convert black money into white.

Citing examples abroad, he noted that India had formally rejected cryptocurrencies, while in the US, they continue to grow in popularity.

He also linked cryptocurrencies to political debates in the US, claiming that former president Donald Trump's administration supported them after facing resistance from the Federal Reserve. Mr. Zaidi quoted a banker as saying the Trump family earned $4.2 billion through virtual currencies during their time in office.

Digitisation versus Crypto : While acknowledging Pakistan's progress in digitising its financial systems, Mr. Zaidi underlined that crypto belongs to a different domain.

'' Digitisation is about documentation and traceability. Crypto thrives on the opposite - anonymity and lack of control,'' he said.

To sum, the use of virtual currencies in stirring economies and the developing world is likely to continue growing, particularly as tight foreign exchange controls limit other avenues for cross-border payments.

The World Students Society thanks Mr. Shahid Iqbal, Dawn.