Government wooing Paypal, pushing Blockchain and hunting Bitcoin traders!

There have been a bunch of news stories lately about various branches of the Government of Pakistan (GoP) pulling in seemingly opposite directions as far as electronic money transfer goes.

First there was the story some weeks back that the State Bank of Pakistan, which is the central bank of the country, wants banks to study Blockchain technology to see if that will help them with their operations. Blockchain is the distributed consensus mechanism that powers most cryptocurrencies like Bitcoin. There has been a global movement by the established financial intermediaries and their government cronies to talk about the Blockchain as a subject worth exploring while at the same time dissing Bitcoin. It seems like the SBP has just jumped on this bandwagon.

Next we have the story of the Commerce ministry wooing Paypal and trying to get them to support Pakistani users. Paypal is a private company that runs a gated payment system where customer accounts can be frozen at any time by the company. Payments made via paypal are also reversible up to a year later.

However Paypal is the most popular payment system for person-to-person transactions on the Internet. The lack of Paypal access can be a deal breaker for Pakistani freelancers and free agents. This is why the Commerce ministry wants Paypal to support Pakistan.

One can only speculate as to why Paypal does not offer its services in Pakistan. What is certain is that it is a private company that can do as it wishes and so far it has snubbed this country.

Then there is the news that the taxmen are investigating some bitcoin traders. Details are scarce as to which traders are being investigated. It sounds like the taxmen suddenly noticed that the bitcoin price has gone up and decided that they wanted their cut!

Overall this paints a picture of a very confused government. On the one hand they are trying to get a company that does not want to do business in Pakistan to offer its electronic money transfer services here. OTOH permissionless and global cryptocurrency systems that actually do work here, and have always worked here, are being dissed and their users harassed. Finally the technology that underpins cryptocurrencies is being pushed among regulated banks but the currencies themselves are considered unacceptable.