Teetering on economic edge, Pakistan eyes dollar-pegged stablecoins through a tie-up with World Liberty Financial, a U.S. crypto outfit tied to Trump circles. A sobering report forecasts intensified dollar addiction, rupee erosion, and systemic shocks ahead.
Daily Mirror’s probe unpacks the dynamics: Such stablecoins pedestal the dollar for value storage and transactions, luring users away from the beleaguered rupee and embedding foreign currency dominance.
The domino effect? Heightened substitution stresses exchange rates, fueling a ruinous feedback loop of devaluation. Amid serial inflation, plunges, and IMF interventions, faith in the rupee hangs by a thread.
For a deficit-prone economy with scant policy levers, this official embrace promises volatility escalation, not mitigation, per the analysis.
Bank bypass is the stealth killer. Liquidity flees regulated rails to digital silos, muting policy impulses in a bank-reliant transmission. Rate tweaks lose bite; management turns labyrinthine.
Breaking from crypto caution, the State Bank now tacitly endorses this external ecosystem—pressured by local influencers, sources claim.
IMF and BIS pile on: Expect bank runs weakening monetary spines; these tools flunk sovereignty litmus tests.
Private liabilities at heart, stablecoins gamble on reserves, law, and issuer mettle. Pakistan’s foreign oversight void and crisis helplessness amplify perils absent in regulated havens.
Decision-makers confront a stark choice: Innovate safely or invite rupee apocalypse. The report implores vigilance to avert irreversible damage.