Due to strict rules against digital currencies in Pakistan's banking laws, it is not possible to buy them directly from official and global exchanges. Here is a step-by-step guide for beginners to buy cryptocurrencies in the country from reliable sources.
Pakistan, a country situated in the South Asian region, is one of those nations where the crypto craze is spreading like wildfire. According to a Chainanalysis' 2021 Global Crypto Adoption Index, Vietnam is ranked at the top with India and Pakistan ranked second and third, respectively.
The adoption of cryptocurrencies is growing rapidly in Pakistan, as the country is struggling with a developing economy. However, a proper adoption of cryptocurrencies on a national level is yet to be seen, and if it happens, it can have a positive impact on the country’s economy, considering how fast the world is transitioning towards a digital economy.
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The History of Cryptocurrencies in Pakistan
Many people in the world, including the citizens of Pakistan, were highly attracted to the world of cryptocurrencies, especially Bitcoin, after the famous bull run of 2017. In that bullish run, Bitcoin experienced an increase of 1,318% while other digital currencies like Ethereum and Litecoin increased by 9,162% and 5,046%, respectively.
During that time, Bitcoin (BTC) was priced at 200,000 PKR, However, at the time of writing, it is somewhere around 7,254,100 PKR. It is obviously a missed opportunity by the Pakistani state authority which failed to realize the potential of Bitcoin and the crypto world. Even minor investments could generate huge returns and help the government with stabilizing its economy.
What Is the Current Situation of Cryptocurrency in Pakistan?
Although Pakistan missed out on a huge opportunity back in 2017, the time is still there as many crypto analysts believe Bitcoin will touch $100,000 by the end of 2021. The good news for local crypto enthusiasts is that cryptocurrency is not illegal in Pakistan, rather it falls in a gray area as the government has no specific rules against it.
However, this has not stopped the Pakistanis from trading cryptocurrencies. Many industry leaders believe that the country can truly cash on cryptocurrencies considering the mass adoption it is experiencing among its citizens. CoinPayments, a leading cryptocurrency payment processor in the world, hired Fahad Shahab as the Business Development Leader for Pakistan. The CEO of CoinPayments, Jason Butcher, said:
"The potential of crypto in Pakistan and other emerging markets is clear," he said. "We believe that CoinPayments is perfectly positioned to help bring cryptocurrency to the masses, particularly underbanked communities who are looking for alternative ways to protect their personal wealth. We are thrilled to welcome Fahad to help us build our presence in Pakistan, and look forward to developing new products and services with his expert input."
Back in March 2021, Ziaullah Bangash, adviser to the KPK government on science and technology, announced plans to build two hydroelectric-powered pilots “mining farms” to capitalize on a bullish global cryptocurrency market. He said:
“People have already been approaching us for investment and we want them to come to Khyber Pakhtunkhwa, earn some money and have the province earn from that as well. It’s really just our government that is not participating right now, people all over Pakistan are already working on this, either mining or trading in cryptocurrencies and they are earning an income from it,” Bangash said. “We are hoping to bring this to a government level so things can be controlled and online fraud or other scams can be prevented.’’
There are many major crypto exchanges that are popular among Pakistanis. Many use Binance, which is the largest crypto exchange in the world, while others also prefer Coinbase, KuCoin, Kraken Exchange, and others.
How to Buy Bitcoin in Pakistan?
Now to the ever-green question of buying Bitcoin in Pakistan. There are many shady methods of buying Bitcoin which provide no guarantee to the buyer and, in most cases, the seller runs off with the money. In such cases, buyers fail to reclaim their money due to a lack of acceptance of cryptocurrency by regulatory authorities in the country. This usually happens when people use crypto exchanges with fewer or weak security mechanisms. Another major reason crypto users fall into scams is that they don’t use any trading platform, rather they deal directly with the seller without getting any third party involved.
A great way to stay away from crypto scams in Pakistan is to use popular crypto buying & selling platforms, like Binance. These exchanges offer multiple options to users for buying cryptocurrencies using Pakistani FIAT currency, i.e. PKR. A few popular methods are explained below:
Unfortunately, the residents of Pakistan cannot buy Bitcoin on Binance (or any other crypto exchange) using their debit or credit cards as the local banks have restricted transactions to or from crypto exchanges with a reason that virtual currencies do not qualify as a legal tender in the country. Below is the statement issued by one of the top banks in the country:
Although Pakistanis cannot directly buy cryptocurrencies using their bank cards from reliable sources, they can always use other methods available to them. The good news is that the world’s biggest crypto exchange, Binance, features a P2P trading platform where citizens can buy cryptocurrencies safely within a few minutes without putting themselves at any risk.
Peer-to-Peer trading, or P2P, provides a platform where buyers and sellers can interact with each other in real-time. Binance acts as a third party in this case where it keeps all transactions secure using an escrow system.
Note: P2P trading on Binance is a reliable and secure method to buy and sell cryptocurrency, however, it still has minor risks which are outlined in the P2P trading guide mentioned above.
How to Buy Bitcoin From Paxful Exchange in Pakistan
Paxful crypto exchange has a smooth UI which makes it easy for the end-users to buy and sell Bitcoins and other cryptocurrencies. To buy Bitcoin on the Paxful exchange, follow this step-by-step guide:
1. Create an account on Paxful by entering your email and password. To activate the account enter a code that will be sent to your email.
2. Navigate to the top left corner of the screen and click on the ‘Buy’ button. You can also choose to click the ‘down arrow’ right next to the Buy button. A drop-down menu will appear, showing options for three cryptocurrencies.
3. Click on ‘Buy Bitcoin’ and you’ll see a variety of traders that are offering Bitcoin at different prices. You can add the amount you want to spend in a slider available on the left-hand side. Here, you may also choose your preferred method of payment. Select a bitcoin seller and click on the ‘Buy’ button located at the right side of your preferred seller’s box.
4. Next, you’ll see a screen that asks you to enter the amount of money you want to pay and shows you how much BTC you will get in return.
Note: You can only trade up to $1,000 worth of cryptocurrency if you haven’t verified your identity. Any amount over $1,000 requires you to follow the ID Verification process of Paxful, outlined here.
5. After adding the desired amount of cryptocurrency you want to purchase, click on “Buy Now.” You will be directed to the next screen where the buying instructions will be clearly mentioned. You can also interact with the buyer and ask questions in case of any confusion. After you’ve transferred the mentioned amount in PKR to the seller’s bank account (or the payment mode you selected earlier), it is advised to share a screenshot in the chatbox and then markthe order as ‘Paid’ on the left-hand side. The seller will review the transaction and once upon receiving the funds in the seller's preferred account, crypto coins/tokens will be released to your Paxful wallet.
Always remember to mark the order as ‘Paid’ as soon as you transfer the funds into the seller's account. If the seller fails to release coins within the mentioned time frame, it is recommended to contact Paxful support by opening a dispute. The support team will help you with the issue.
This process is secure and reliable as the platform uses an escrow system to keep your money secure. Whether you are a buyer or seller, the platform makes sure to handle all the disputes in an efficient manner.
LocalBitcoins.com Is Another Option
Although the p2p marketplace has been operating since 2012, it gained popularity in Pakistan back in 2015 as new investors relied only on this platform to buy cryptocurrency (probably due to lack of awareness of other platforms). During that time, LocalBitcoins.com played a major role in facilitating Pakistanis to acquire Bitcoin and transfer it to other major cryptocurrency exchanges for trading. Although the platform is still active, the increased verification processes have diverted the majority of people in the crypto community of Pakistan to other crypto exchanges.
Where Is the Crypto Market Headed in Pakistan?
The crypto market is booming in Pakistan, however, since the local authorities haven’t legalized it, many crypto traders in the country fear talking about their investments and interest in the public. Somefear that they will be labeled as ‘money launderers’ while others believe that will end up being investigated by the Federal Bureau of Revenue (FBR) for tax evasion (another gray area in the local laws).
The growing enthusiasm related to cryptocurrencies can be seen in the youth in the country, but just like the rest of the world, the older generation is quite skeptical about it due to the volatility that exists in the crypto market. Although Pakistan is globally ranked at third place when it comes to crypto adoption, the real wave of cryptocurrencies is yet to be seen in the country. It will most likely happen when the local authorities acknowledge the importance of cryptocurrency and give it a legal status in the country.
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