Context:

• A major geopolitical and technological development is underway involving cryptocurrency diplomacy between Pakistan and World Liberty Financial Inc (WLFI) — a firm associated with the Trump family.
• This comes amid Trump’s second administration’s renewed engagement with Pakistan and aggressive push for US crypto leadership.

 Pakistan-WLFI Crypto Collaboration:

• MoU and strategic goals:
  • MoU signed between WLFI and the newly formed Pakistan Crypto Council.
  • Key stakeholders involved: PM Shehbaz Sharif, Army Chief Asim Munir, and WLFI delegation.
• Objectives of the MoU:
  • Use blockchain for financial inclusion.
  • Monetise untapped national assets like rare earth minerals.
  • Introduce stablecoins for trade and remittances.
  • Position Pakistan as a regional crypto hub.
• Concerns and viability:
  • Pakistan’s fragile economy raises questions about execution.
  • Potential misuse of cryptocurrencies for terror financing and money laundering remains a concern, particularly for India.

Trump’s Second Term Crypto Agenda:

• Shift in US policy:
  • Trump reversed earlier crypto scepticism (and promised to dismantle the Biden-era hostility toward the sector) and gained industry support.
  • Within days of re-election:
    • Executive order 1:
      • Established National Blockchain Innovation Strategy.
      • Banned CBDC (Central Bank Digital Currency).
      • Formed President’s Working Group on Digital Asset Markets, led by David Sacks (White House’s “AI and crypto czar”).
    • Executive order 2:
      • Created Strategic Bitcoin Reserve and US Digital Asset Stockpile.
      • Consolidated seized assets like Bitcoin, Ethereum, Solana.
      • Aimed to preserve US dollar dominance through stablecoins.
• Key appointments and market response:
  • Notable pro-crypto appointments: Elon Musk, David Sacks.
  • Regulatory rollback: Securities and Exchange Commission (SEC) paused lawsuits, Justice department disbanded crypto team.
  • Market impact: Bitcoin surged beyond $100,000 recently (from $74,000 in March 2025).
  • Trump launched the meme coin "$TRUMP", making himself a direct stakeholder.

Pakistan’s Crypto U-turn:

• Rise of domestic ecosystem:
  • Until 2024, Pakistan had banned or restricted crypto use.
  • In 2025:
    • Appointed Bilal bin Saqib to lead Pakistan Crypto Council.
    • Saqib became Special Adviser to PM to build crypto regulations.
    • Pakistan may have up to 25 million crypto users and a market worth $2 billion.
• Leveraging diaspora influence:
  • Diaspora strategy modeled on India’s Pravasi Bharatiya Divas.
  • Aims to connect with Pakistani-American tech entrepreneurs.
  • Diaspora convention used to reaffirm Pakistan’s ideological and strategic identity.

Strategic Implications for India:

• Security and technological threats:
  • Analogous to India’s past underestimation of Pakistan’s nuclear ambitions.
  • Risks of terror financing, cross-border laundering via crypto remain high.
• India’s policy vacuum:
  • India has over 100 million crypto users, and a $7 billion crypto market.
  • Yet, there is no clear regulatory or strategic framework.
  • Supreme Court intervention in Shailesh Bhatt case highlighted:
    • Taxing crypto without regulation is legally inconsistent.
    • Warned of economic and national security risks.

Conclusion - India’s Strategic Imperative:

• The rise of Trump’s crypto diplomacy and Pakistan’s digital realignment demand urgent Indian policy introspection.
• India must develop a comprehensive national crypto strategy; evaluate security, economic, and geopolitical dimensions; and avoid repeating the mistakes of strategic neglect.