Pakistan is losing a large amount of money because of illegal cryptocurrency trading. The country has already lost around $600 million and this has reduced the flow of dollars into the banking system. Instead of putting dollars into banks, many people are buying dollars from exchange companies and secretly investing them in crypto through unlawful channels.
This is weakening an already stressed economy. According to Malik Bostan, chairman of the Exchange Companies Association of Pakistan, exchange companies sold about $4 billion to banks in the first 10 months of last year. But this year, during the same period, sales dropped to $3 billion.
It is an educated guess that most of the missing dollars ended up in illegal crypto investments. People buy dollars, deposit them in their foreign currency (FCY) accounts, withdraw them again, and then send the money into crypto networks without permission or record. During January to October, Pakistanis kept about $400 million in their FCY accounts, while $600 million simply vanished from the system.
The government has struggled with dollar shortages for years and narrowly avoided default in 2023. This drop shows how deeply illegal crypto trading has affected the formal banking system. At a time when Pakistan desperately needs foreign reserves, such losses create serious risks.
After the IMF bailout, the government cracked down on smuggling and illegal trading. That effort brought some stability, but this new wave of secret crypto investment threatens to undo those gains. There is now a clear need for stricter regulation, stronger monitoring, and public awareness. a
People must understand that illegal crypto trading does not only break the law: it weakens the national economy. Without firm action and clear rules, Pakistan will continue to lose precious dollars, and the burden will fall on ordinary people already facing rising prices and financial stress. *