In order to take advantage of the increasing popularity of the crypto market, a Pakistani Province is planning to venture into it. The government of Khyber Pakhtunkhwa is the latest to jump on the crypto bandwagon with its plans to construct a mining farm.
Khyber Pakhtunkhwa, a Province of Pakistan is preparing to construct two hydroelectric-powered pilot mining farms. With this the provincial government aims to reap financial benefits of the bullish trend in the crypto industry. According to Reuters this was revealed by a minister who is supervising a new crypto policy by the government.
While the cost of setting up the mining farms hasn’t yet been revealed, it is going to be a costly affair. Crypto mining farms require substantial investment in computer data centers, requiring significant amount of power. However Pakistan will have to consider whether it’s really viable given the country is already struggling with power crisis.
Reportedly, a member of the Provincial Assembly stated that the province has already been approached by crypto investors. He further expressed the province’s eagerness to welcome these investors who want to make some money. This would also allow the province to earn from them. Khyber Pakhtunkhwa is a famous tourist destination due to its topography and the crypto project is a plus for its tourist industry also.
Just as cryptocurrencies gain immense popularity and mainstream acceptance, this announcement comes, although State bank of Pakistan is yet to recognize digital assets. Back in 2018, the state bank had announced that digital tokens were not a legal tender. It had also stated that no one in the country was authorized to deal in them, thereby restricting crypto trade in the country.
However, the State Bank might soon change its view, since the Pakistani government has formed a federal committee for cryptocurrency. The committee is required to device a policy for the cryptocurrency. While Pakistan moves in this direction there are speculations that its neighboring rival India might be banning the digital asset altogether.
Cryptocurrency, like the Bitcoin has been reaching new highs each week. The token that started at $0.0008 back in 2010, has jumped over $57,000 over a span of 10 years. In 2020 alone it saw an increase of almost 224% from the start to the end. Other digital tokens such as Ether and Ripple are also picking pace. Similarly Dogecoin is also gradually capturing an audience. Such a positive trend in cryptocurrency is what has prompted the Pakistani province to look into this aspect as well.
In Pakistan there is currently no legal framework with respect to cryptocurrency, leaving the digital asset in a grey area. Before formally opening to investors, the federal as well as the provincial governments will have to ensure regulation of the cryptocurrency. A clear path needs to be paved to legalize the crypto industry.