When Pakistan turns "Crypto Assets" into a national strategy for South Asian games.

Author: Walid Abou Zaki Translated by: BlockWeeks

When President Trump praised Pakistan over India, it was not just a political stunt, but also marked a deeper strategic adjustment. Islamabad is integrating cryptocurrency and digital asset policies into the framework of energy, trade, governance, and diplomatic relations. The results are reflected in: a surge in favorable sentiment towards the U.S., increased global attention, and a shift in the power dynamics of South Asia.

Foundation Road - Long Before Headlines

Pakistan’s journey with blockchain and digital assets did not begin in 2025; its seeds have long been sown:

• March 2023: The Avanza Group announced the launch of the country’s first blockchain-based national eKYC platform, strengthening compliance and digital identity infrastructure;
• December 2023: Invoicemate completed a private credit pilot on the XDC network, showcasing the role of blockchain in financing and digital trade for small and medium-sized enterprises.

These milestones lay the foundation for subsequent national ambitions.

From Framework to National Strategy

In the past eight months, Pakistan has moved from pilot to policy.

• “2025 Virtual Assets Ordinance”: Establishes a legal framework for the Pakistan Virtual Assets Regulatory Authority (PVARA), granting it the authority to license and regulate crypto service providers;
• Central Bank Digital Currency Pilot: The State Bank of Pakistan has launched a digital currency trial, aiming to complete it within this fiscal year;
• Pakistan Crypto Council (PCC): Established in March 2025, chaired by the Minister of Finance, with Bilal Bin Saqib as CEO; Binance founder CZ serves as a strategic advisor;
• Energy to Computing Power Strategy: Redirect 2000 megawatts of surplus electricity to Bitcoin mining and artificial intelligence data centers, supported by sovereign strategic Bitcoin reserves. This may attract regional miners (especially in the Gulf region) to relocate their capacity to Pakistan. As the UAE’s Phoenix Group positions itself as a global player in mining and computing power infrastructure, the focus is on whether Pakistan’s tariff incentives and surplus energy will attract such operators to move eastward;
• Pakistan Digital Authority (PDA): Responsible for coordinating the national digital transformation, streamlining identity verification, and nurturing a state-supported digital economy;
• WLFI and PCC Cooperation Letter of Intent (April 2025): The DeFi platform World Liberty Financial (WLFI), associated with Trump, signed an agreement with the Pakistan Crypto Committee to promote the implementation of blockchain and DeFi, a stablecoin settlement framework (such as tokenization, asset-backed channels), and a regulatory sandbox framework. Previously, the founder of WLFI had a high-profile meeting with CZ in Abu Dhabi, highlighting the expansion of the Pakistan Global Crypto Alliance.

These steps are not only regulatory but also institutional infrastructure that supports economic and geopolitical strategies.

Deliberate Opening of Washington

The U.S. has shown a friendlier stance towards Islamabad than New Delhi:

• Tariff Reductions for Pakistan: The new trade agreement lowers tariffs on textiles, IT, and agricultural products, and opens up cooperation on oil reserves and digital assets;
• Tariffs Imposed on India: In contrast, Washington has imposed a 25% tariff on Indian goods starting from August 7, which will rise to 50% by the end of August, in retaliation for its discounted purchases of Russian oil.

Pakistan’s tariff rate is about 19%, which is much lower than India’s, making it a more favored export country in Asia. This reflects Washington’s policy orientation of “rewarding allies and punishing independence.”

India’s hesitation

India remains an economic powerhouse in South Asia, but its cryptocurrency policy is characterized by high taxation, strict regulation, and a focus on speculation rather than strategic infrastructure. Despite India’s promotion of local innovations such as UPI and ONDC, it has not integrated cryptocurrency assets into its strategic framework. The contrast is stark: Pakistan aligns its cryptocurrency policy with U.S. priorities and builds new alliances, while India is still “talking theory.”

The Rise of Resistance and Costs in India

India’s pursuit of strategic autonomy is leading to consequences:

• The new tariffs in the United States are expected to reduce its GDP by 0.3%-0.6%;
• The continued inclination towards Russia and a multipolar economic model has intensified tensions with the United States and caused unease among the “Quad Security Dialogue” partners.

In comparison, Pakistan has been more rapid in regulatory advancement and geopolitical alignment, making it a more accessible and attractive partner.

The Profit Outlook for Pakistan

• Capital Attraction: A clear regulatory framework and global advisors make it a center for exchange, custody, and tokenization innovation;
• Energy Monetization: Utilize surplus electricity for Bitcoin mining and AI computing power, turning energy liabilities into revenue-generating assets;
• Remittance and Trade Innovation: CBDC pilot and licensing framework support stablecoin settlement, reducing costs for millions of people;
• Diplomatic Leverage: Cryptocurrency policy has become a diplomatic tool, strengthening Pakistan’s negotiating power with Washington.

Geopoliticization of Cryptocurrency

This shift is not only a financial strategy but also a geopolitical game. By rewarding Pakistan for its cooperation, Trump is simultaneously pressuring India regarding its independent tendencies—especially concerning discounted oil deals with Russia and attempts at de-dollarization. Cryptocurrency plays both a symbolic and practical role in this balancing act.

Pakistan’s willingness to integrate digital assets into its national strategy has earned it space and favor, while India’s hesitation has exposed it to tariffs and pressure. The question is: will Pakistan’s digital asset strategy become a sustainable infrastructure, or is it merely a speculative product of the current geopolitical competition?

Regardless, cryptocurrency has risen from an industry level to a governance level in South Asia, and the power dynamics are adjusting accordingly.