- Reports cite the increasing illegal use of stablecoins like USDT in Pakistan.
- Stablecoins are used as an alternative to hawala or hundi systems.
- Despite growing crypto adoption, remittances declined, revealing the informal use of the tokens.
Amidst the growing adoption of cryptocurrencies and stablecoins, threats and risks surrounding these assets are also ascending at a similar pace. According to the latest reports, stablecoins like Tether (USDT) are increasingly used in illegal trading and transactions in Pakistan.
Reports suggest that the cryptic nature of the stablecoins makes it difficult to track them, enabling people to trade them informally, especially using them as a means of hawala or hundi trade. According to the Foreign Exchange Management Act (FEMA), hawala and hundi systems are considered illegal in Pakistan.
While Pakistan boasts a potential $40 billion in crypto remittances, the yearly analysis indicated a massive decline. In 2022, the nation received $31.3 billion in remittances, whereas in 2023, the data revealed a significant decline, with nearly $10 billion diverted toward informal channels.
Reflecting on the crucial fact, Shabbar Za…
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