By Pakistan’s economy is plagued by inflation, declining foreign reserves and growing trade deficit. Recently, Pakistan has received $1 billion in aid from the IMF, with a condition that the tax network be expanded and the informal economy be formalized.
Pakistan, which is facing a financial crisis, has turned to crypto currency. Pakistan, which has taken a bailout from the IMF and is thriving on financial assistance from China, is now exploring possibilities in digital currencies, which has raised many questions. Earlier, crypto was completely banned in PAK. Now Islamabad’s sudden interest in digital currencies is surprising.
At present, PAK’s economy is plagued by inflation, declining foreign reserves and growing trade deficit. Recently, Pakistan has received $1 billion in aid from the IMF, with a condition that the tax network be expanded and the informal economy be formalized. Under this, crypto assets have also been brought under regulatory monitoring.
According to a Business Today report, Pakistan claims that this step has been taken to improve fintech innovation, youth empowerment and the flow of remittances. However, experts believe that there are reasons of geopolitics behind this and it cannot be ignored.
FATF’s eye and the threat of terror money
In fact, Pakistan has made many efforts to avoid the list of Financial Action Task Force (FATF), but India and Western countries have repeatedly questioned Pakistan regarding terrorist funding. PAK has been accused of terrorism financing and money laundering. In such a situation, the risk of cryptocurrency being used for money laundering and terror financing increases.
Crypto is notorious for its opaqueness and decentralization. In such a situation, the adoption of crypto has become a matter of concern. Analysts warned that Pakistan’s turn to crypto could open new ways to evade sanctions and transfer funds beyond the reach of global monitors.
Trump family and Pakistani army deal…
A shocking incident came to light in late April. Pakistan Crypto Council (PCC) has entered into an agreement with the American firm World Liberty Financial (WLF). Interestingly, Trump’s sons Eric and Donald Jr. as well as his son-in-law Jared Kushner have a 60 percent stake in WLF.
That is, what should have been a regular fintech partnership became a subject of geopolitical controversy. In fact, Pakistan Army Chief General Asim Munir was also present in the room at the time of the deal. Asim Munir’s presence in this agreement made it much more than a normal business deal. This is a clear indication that this is not just a blockchain venture, but a strategic move.
Trump’s ‘peace proposal’ after Kashmir attack
Just days after the WLF-PCC deal, terrorists attacked the Indian city of Pahalgam on April 22, killing 26 tourists. This incident again flared up hostility between India and Pakistan. Meanwhile, Trump claimed to be a ‘peace broker’ and said that instead of war, do business. On the social site Truth, he praised the leadership of both countries for preventing war.
The timeline of this entire incident cannot be ignored. First, a business deal was struck in a family atmosphere in Islamabad and Pakistan’s top military officer participated in it and soon after that Trump’s diplomatic self-praise is shocking.
Although Pakistan claims that its crypto initiative is in line with FATF guidelines, experts point to such global examples.
‘Bitcoin Shakers’ Model
The ‘Bitcoin Shakers’ model was started by Hamas. It involves raising funds through cryptocurrency and protecting it from international financial surveillance through money laundering. Terrorist organizations like Izz-al-Din-al-Qassam Brigades have used bitcoin donations, decentralized exchanges, privacy coins and mixers to hide transactions and raise funds for terrorist activities.
Is Pakistan adopting the Hamas model?
Experts believe that Pakistan’s crypto approach is similar to Hamas’ ‘bitcoin shakers’ model, which uses digital currencies to fund terrorist activities. Organisations like Hamas have concealed funding sources using bitcoin donations, privacy coins and mixers.
For now, these methods have evolved and become widespread over time, despite global actions such as wallet seizures by Israeli and US authorities. For a country like Pakistan, crypto has now become the next frontier to evade sanctions.
Pakistan’s ability to move money beyond traditional banking oversight through decentralized platforms is raising serious security concerns not only for India but also for global financial stability.
Pakistan’s crypto agenda…
- Economic diversification: Attracting foreign capital amid dwindling options, especially through Trump-linked business interests, is seen as a deliberate move.
- Financial resilience: Establishing alternative channels to bypass the traditional financial system subject to Western surveillance.
- Strategic advantage: Deepening ties with the US through Trump family businesses to avoid diplomatic isolation.
- Secret funding: Use of digital currency for terror financing while evading traditional financial oversight.
Trump and Pakistan… Economic partnership or security threat?
Trump’s claim of peace mediation and his family’s crypto deal have raised concerns in both Washington and New Delhi. Although neither Trump nor his family have commented on the implications of this deal, the circumstances clearly send a message. The question is arising whether Pakistan’s love for crypto is a new way of terror financing amid the strict scrutiny of the IMF and FATF?
For now, is Pakistan’s crypto move an attempt to deal with the economic crisis or a new weapon for terror funding? The deal involving the Trump family and the presence of the Pak Army Chief have further complicated the geopolitical aspects of this move.