THE last two decades have witnessed a revolution in technological development.
Web technologies have evolved from static Web 1.0 pages to dynamic Web 2.0 and now to the decentralised promise of Web 3.0. More importantly, we have seen a fundamental shift in how economies, governance, and even the idea of trust operates.
Corporations now aim not only to dominate national markets, but they dream of a universal presence — Elon Musk’s SpaceX and Starlink is a classic example. This new world order is bringing about a power shift — from states to corporations.
While global institutions are designing the future, Pakistan is grappling with the idea of whether this future is real. Blockchain, cryptocurrency, and artificial intelligence aren’t ideas that exist only within the realm of sci-fi; rather, they are forming the backbone of tomorrow’s economy. The trillion-dollar question now is: can Pakistan keep up all the while protecting its citizens?
In all fairness, Pakistan has made commendable progress. The formation of the Pakistan Virtual Assets Regulatory Authority under the recent ordinance is a step in the right direction. Aligning with Financial Action Task Force and anti-money laundering frameworks, and acknowledging the need to monitor digital assets rather than simply banning them, reflects a maturing view.
The average citizen lacks the digital literacy required to navigate a decentralised financial world
But these initiatives run the risk of becoming token gestures if the broader mindset continues to treat crypto primarily as a taxable asset to plug fiscal gaps. Revenue-oriented policymaking will fail to provide long-term stability and trust that this market needs.
Regulatory frameworks must move beyond taxation and address market integrity, transparency, and consumer protection. Rampant misinformation and deceptive marketing practices pose a significant challenge in the cryptocurrency space. Consumer exploitation by platforms is common — speculative investments are promoted by publishing sophisticated-sounding reports and materials that blur the line between objective analysis and covert advertising.
We saw Binance publishing blog posts and promoting Terra (Luna) across social media platforms, describing it as a “blue-chip” project with sustainable yields, without adequate risk disclosure. In 2022, Terra (Luna) collapsed, wiping out billions of dollars in investor savings. Pakistan needs regulatory frameworks that prevent consumer exploitation and hold platforms accountable.
Additionally, the regulatory framework currently lacks clarity regarding the listing of new cryptocurrencies on exchanges. Unlike traditional financial markets, where securities undergo rigorous vetting to obtain pre-trading approvals from regulatory authorities, the crypto market leaves vetting and listing decisions to private exchanges.
There are no national standards or uniform criteria to ensure investor protection or market integrity. This raises serious concerns. Who ensures investor security when a token can be listed with minimal accountability? Who defines what minimum standards a coin must meet before being publicly traded? This illustrates a pressing need for formal regulatory scrutiny.
In a market where commercial priorities of exchanges often supersede due diligence and transparent risk disclosure concerns, the absence of clear regulatory oversight leaves investors exposed to heightened risks of fraud and manipulation. Pakistan must take heed from the obvious pitfalls of failing to properly regulate the crypto space and must create comprehensive guidelines for investor safety.
Beyond policy and legal measures, the real challenge lies in societal readiness. The average citizen lacks the digital literacy required to navigate a decentralised financial world. In a country where people fall for scam links promising free cash prizes or send money to complete strangers on the promise of unsecured loans, the idea of responsible participation in a borderless, trustless financial system seems far-fetched.
In such a context, regulating crypto is not just about controlling commercial entities — it’s about safeguarding ordinary citizens from fraud, misinformation, and technical exploitation. Consumer protection must be woven into the laws from the very outset.
There’s also the question of capacity. Effective oversight requires deep technical understanding, not just will. Blockchain, smart contracts, or decentralised finance cannot be regulated with the same bureaucratic logic used to regulate conventional banking. Pakistan’s regulators lack the technical knowledge to oversee such rapid technological change. Even well-intentioned regulations will fail if the implementation mechanism cannot keep up with rapid technological change.
Furthermore, dispute resolution remains a major bottleneck. Courts are overburdened and under-resourced. Judges and legal officers do not understand the complexity of blockchain-based systems, smart contract failures, or disputes with global entities. In such an environment, ensuring justice for consumers is a gamble.
If we continue to funnel digital asset cases through an outdated legal infrastructure, delays and misjudgments are not just possible — they are guaranteed. Pakistan needs special tribunals composed of blockchain experts, finance professionals, and cybersecurity analysts to ensure timely, competent and fair handling of the digital asset-related cases.
Shift from Web 2.0 to Web 3.0 is not just a shift in technology; it’s a shift in power — from the state to the user, from conventional centralised banks to decentralised financial institutions, from governments to corporations.
Pakistan must stop playing catch-up with the past. It must design smarter regulations, establish consumer safeguards and invest in institutional capacity. It must move from reactive policymaking to leadership. Without that, the next disruption doesn’t just threaten to leave Pakistan behind, but it threatens to render us irrelevant.
The writer is a practicing lawyer based in Lahore. Email: [email protected]
