Digital currency adoption in Pakistan

Junaid Afzal

Summery:

Due to post covid-19 and the unpredicted changes in financial technology contributed to unexpected
financial challenges, affecting the relevance of financial decision making and financial well-being. This
paper validates digital financial literacy on usage of digital money. The data come from respondents of
youth of Pakistan via a questionnaire shared to them by social media and personal contact.

The term Digital Money means form of wealth which have no physical existence, instead of
being physical they are in the form of digital such as easy paisa, jazz cash, online balance and
bit con. This is modern form of currency grabbing much attentions in current era and have much
great importance by many aspects. Such as government agency may check their flow such as if
we buy a laptop from market and pay in cash, then this transaction can be concealed by
government agencies for evasion of tax and other duties. It is Such as 16% of Americans say
they have ever invested in, traded or used Digital Money. while in Pakistan only 4.1% are using
Digital Money, because in Pakistan people are aware of this and may have many serious
concerns to avoid to use cryptocurrencies, such as they may think this is fraud, or they can have
to suffer serious loss on their principal amount and some people even wonder is this is form of
currency? So, in this study about some factors by which Pakistan is legging in use of Digital
Money.
Introduction: Digital Money is growing very rapidly, in the rest (khan, 2017)world as compared
to Pakistan. It is digital form of currency and current assets, difference companies are providing
this to general people and earning a lots. But people of world are still feeling hesitate to use
Digital Money. These are caused by different type of perception, thought and approaches. The
adoption of cryptocurrencies is uneven across businesses, industries, and countries. Different
forces drive cryptocurrency adoption (CA) dependent on the national level of
development(Saleh, Ibrahim, Noordin, & Mohadis, 2020).

BACKGROUND OF CRYPTOCURRENCIES
Money has basic Digital Money is started to emerged in the early 1980s in an attempt to create
a decentralized currency to trade online. This currency was known as "cyber currency" in early
1980s. The idea of this currencies was gradually improved in the 1990s. However, the biggest
concerns then were security and double spending. Double spending refers to a situation where
the currency is copied and reused for further transactions. This Digital Money business was
fueled by the events of the economic recession of 2007 to 2009, giving rise to the global
financial crisis. During this time, a number of people lost some degree of confidence in physical
currency. The first Digital Money , known as Bitcoin, came into existence in 2008. It is a digital
currency that uses a peer-to-peer protocol to facilitate transactions and was developed based
 on Satoshi Nakamoto’s concept of block chain. When cryptocurrencies first appeared in 1998,
Bitcoin served as a working example of the concept, and the number of people using Bitcoin
has significantly increased since then. After a group of anonymous coders announced Bitcoin in
2008, other digital currencies, known as altcoins, were later developed (Agu, 2020).
1.1 Digital Money Performance in Pakistan
Cryptocurrencies are also gaining popularity in Pakistan. Its first Digital Money, Pak coin, was
launched in 2015. Since 2009, payment systems have witnessed a great deal of innovation,
including solutions such as Easy paisa. The popularity and growth of these systems suggests
there is potential for the growth of cryptocurrencies in the country. In November 2017, the IMF
chief advised Pakistan not to dismiss these virtual currencies because of consumer
preferences(Husain, 2017).
However, the State Bank of Pakistan (SBP) and Federal Board of Revenue have shut down
against the advice of IMF chief of use of digital currencies in the economy. The SBP (2016)
does not recognize any digital currency. A circular issued in April 2018 clearly states that the
government does not support the trade of such currencies; rather, transactions involving such
assets should be reported.7 The Federal Board of Revenue and Federal Investigation Agency
have taken legal action against Pak coin as well as globally recognized currencies such as One
Coin and Bitcoin (khan, 2017) charging them with tax evasion and money laundering

Hypotheses development
Null hypotheses H0: leval of awareness = leval of using digital money
Research hypotheses H1: leval of awareness > leval of using digital money
One tail test will be applied.

Dependent variable
independent variable
Digital Financial Adoption of
Literacy Digital money

Governance
standards

Transparency
of transaction

Research methodology
A detailed online questionnaire will be distributed to youth of Pakistan via Facebook. Our
questionnaire required basic information like financial literacy, have they ever used
cryptocurrencies and how cryptocurrencies can be improved in Pakistan.
1. Survey questionnaire developments
Simple questionnaire will be developed and shared to youth of Pakistan via Facebook, Personal
contact and WhatsApp about are they are aware of digital money not. And another question will
be are they are using digital money or not. Second part of questionnaire will include how usage
of digital money can be enhanced or what are there concerns.

Data analysis
Data will be analyzed through spss, and conclusion should be made upon whether level of
awareness of digital money is greater than level of people using cryptocurrencies

Governance standards

Adoption of digital currency can results to improve the governance system by increasing in validity,
transparency, minimizing the delays, protection of data lose and decreasing the information asymmetry
(Banerjee, Duflo, Imbert, Mathew, & Pande, 2020). They are numerous benefits by introducing the
digital currency such as reduction in corruption by elimination of different intermediaries.

Transparency of transaction

The main concern of people to adopt digital currency is transparency of transaction. No doubt the digital
currency has high level of transparency of transactions.

Digital Financial Literacy

People of Pakistan are not much digital financial literae. Many of them have no how now about
digital financial literacy. This is factor of adoption of digital financial currecy.

Adoption of Digital money

This is ultimate objective of our study. From literature review it is come to know that
adoption of digital money is dependent of above discussed factors
BY Looking into P- value, TOT is significant at 1 %, while GS is significant at 5 % and
TOT is insiginifacnt, because their value is higher then 0.10

Reference
Kamau, C. G. (2022). The cryptocurrency Market in Kenya: A Review of Awareness and
Participation by the Youth. Journal of Asian Business Strategy, 12(1), 49-56.
Agu, C. J. (2020). Impact of cryptocurrency on Africa’s economy. Retrieved from:
researchgate.net

Agu, C. J. (2020). Impact of cryptocurrency on Africa’s economy researchgate.net.

Banerjee, A., Duflo, E., Imbert, C., Mathew, S., & Pande, R. (2020). E-governance, accountability, and
leakage in public programs: Experimental evidence from a financial management reform in
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Husain, T. (2017). Is Bitcoin the future for Pakistan? Express Tribune: Retrieved from
https://tribune.com.pk/story/1563057/2-financial-innovation-bitcoin-future-pakistan/.
khan. (2017). FBR goes after bitcoin traders. Dawn. Retrieved.
Saleh, A.-h. A. I., Ibrahim, A. A., Noordin, M. F., & Mohadis, H. M. (2020). Factors Influencing Adoption of
Cryptocurrency-Based Transaction from an Islamic Perspective. Global Journal of Computer
Science and Technology.