The Pakistan government is said to be integrating a blockchain platform built by Alipay. But, the country is not open to adopting cryptocurrencies like Bitcoin for making payments.
The initial steps taken by the Financial Action Task Force (FATF) of Pakistan to use a blockchain application to battle money laundering, shows the inclinations of the central banks and major monetary institutions of Pakistan. They are in favor of blockchain over bitcoin.
Many months ago, Pakistan associated with a financial corporation named Telenor Microfinance Bank. It is an arm of Alepy which is a $150 billion fintech major company from China, and it holds a 45 percent stake in Microfinance Bank by providing a huge sum of $184.5 million.
This week, Pakistan declared the incorporation of blockchain payment settlement platform in which a major bank named Standard Chartered Bank is playing a role of settlement bank. The bank will process international payments made between Malaysia and Pakistan.
The governor of the State Bank of Pakistan and its president Mr. Bajwa stated that the usage of the blockchain by the government shows a notable achievement in the direction of increasing financial inclusion in Pakistan.
Bajwa stated that this decision earns a position for Pakistan in the list of very few countries in this world which have officially adopted the use of blockchain technology to conduct international payment settlements.
However, while talking to The Express Tribune, the State Bank of Pakistan representative said that the government does not accept Bitcoin and different forms of digital currencies. This raises a question on the objectives of the government behind taking this particular step.
The Pakistani government has incorporated a blockchain powered platform with the bank’s network (in this case State Bank of Pakistan) to give significant control to the bank over the banking network.
The allowed form of network is similar to the current system used by numerous national banks.
Experts on Pakistan are cautioning people on not to get overwhelmed by the present decision taken by the country. The decision is contradicting with the ban pt by the Pakistani government on the use of cryptocurrencies. This is confusion many people about the real motto of the government. Some are saying, the government is trying to use this decision as a blanket to cover up the real motto.
The real question is, does it actually increase financial inclusion in Pakistan?
One of the significant contributing components behind the limited financial accessibility in many regions and countries in the world is the existence of major financial and monetary institutions which set irrational goals and unrealistic expectations that create a challenging environment for people to get financial services.
To enhance financial inclusion, the number eligible of people benefiting from financial services has to increase; however, if the same banks are in charge of the operations, then even with the involvement of blockchain, it could not impact more on financial inclusion.
Crypto money like Bitcoin can give monetary freedom to people since it doesn’t limit people from using the system.