The last few months have exponentially increased societal, investor, and policy interest in the crypto, blockchain, and Web 3.0 technologies, increasingly referred to as Web3. Cryptoasset price volatility and the promise of exponential returns is a primary driver of interest, and a dramatic surge in cryptoasset investors is in turn forcing regulators to take notice of developments in this ecosystem. Pakistan ranks third in terms of crypto adoption in the Chainalysis 2021 Global Crypto Adoption Index; we estimate that Pakistan has more cryptoasset than public equity investors.
This paper is an initial attempt to frame debate about the Web3 ecosystem in Pakistan – which is a $100+ billion opportunity – and make recommendations on how policymakers should approach regulating this sector. At its core, the evolution of the Internet is a tremendous economic opportunity for Pakistan. Developing an enabling environment can create millions of new jobs, open new avenues for upward social mobility, and generate wealth for countless households across the country. In addition, excelling in this emerging Internet economy can help Pakistan leverage its talent to generate significant export revenues that are necessary to achieve sustainable economic development and stability.
Stakeholders should regard this working paper as an initial attempt to further the conversation. Deeper research and engagement is necessary in the short term, and one hopes that key stakeholders come together to ensure that Pakistan does not miss the emerging Web3 opportunities.
The South Asia Center serves as the Atlantic Council’s focal point for work on the region as well as relations between these countries, neighboring regions, Europe, and the United States.
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SouthAsiaSource Feb 14, 2022
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