Yesterday, Pakistan’s Ministry of Finance declared the creation of the Pakistan Digital Assets Authority (PDAA). The regulatory organization will monitor the nation’s estimated $25 billion unregulated cryptocurrency industry and accelerate the growth of Pakistan’s virtual asset economy.
It will be in charge of licensing, compliance, and innovation in the digital asset ecosystem. Under a single, flexible framework, it will also regulate stablecoins, wallets, tokenized platforms, exchanges, custodians, and decentralized finance (DeFi) applications.
According to the PDAA, Pakistan is joining other progressive economies like the UAE, Japan, Singapore, and Hong Kong, all of which have set up digital asset regulators to promote innovation and guarantee adherence to international financial standards.
$25 Billion Prospects for the Crypto Market
The establishment of the authority continues the nation’s recent initiatives to adopt blockchain and cryptocurrencies. For instance, in March, the country established the National Crypto Council (NCC) to develop a legislative framework for cryptocurrency trading. Changpeng Zhao, the former CEO of Binance, was named a strategic advisor.
The Anti-Money Laundering (AML) and Counter Terrorism Financing (CTF) authorities also unveiled Pakistan’s first-ever policy framework on digital currencies last month. This framework aims to conform to the worldwide Financial Action Task Force’s (FATF) criteria for financial integrity and compliance.
The authority will also facilitate the tokenization of government debt and national assets in addition to the cryptocurrency market, opening up new avenues for national funding. One approach to turn an existing problem into a source of income is proposing the use of regulated Bitcoin mining businesses to profit off Pakistan’s excess electricity.
Creating the PDAA is a strategic move to position Pakistan as a competitive player in the global digital economy. By establishing a regulatory framework that complies with the FATF, Pakistan hopes to foster responsible innovation at home and gain the trust of its foreign partners.
Additionally, by providing local and international investors with much-needed legal clarity, the regulatory body may attract significant foreign investment into Pakistan’s developing digital economy.
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