Crypto Arms Race: India and Pakistan Battle for Blockchain Dominance

South Asia’s bitter rivals are now clashing in a new arena—cryptocurrency adoption. While regulators on both sides play whack-a-mole with bans and restrictions, grassroots adoption tells a different story.

India’s tech-savvy millions drive P2P volumes—despite the government’s love-hate relationship with digital assets. Meanwhile, Pakistan’s remittance-hungry economy quietly embraces stablecoins, proving that dollar-pegged tokens outperform unstable fiat (who knew?).

Both nations share a common thread: citizens treating crypto regulations like loose suggestions rather than law. When your currency’s purchasing power melts faster than an ice cream in Karachi, decentralized alternatives start looking mighty appealing.

One cynical takeaway? The ’war’ here isn’t about adoption—it’s about which government will finally admit defeat and tax what they can’t stop.

Pakistan Moves Boldly into Crypto While India Lacks Traction

The story began when the Crypto Council head from Pakistan, Bilal Bin Saqib, took everyone by surprise when he made an announcement at the bitcoin 2025 conference in Las Vegas. Pakistan is not just testing crypto—it is fully committing by establishing the Strategic Bitcoin Reserve with support from the government.

Things get more interesting here: Pakistan formed its own reserve only three months after the United States did the same. For years, India has said it will release a crypto discussion paper, and the latest date promised is “June 2025,” which keeps getting closer but never arrives.

It’s almost like poetry how ironic it all is. Pakistan, which was once considered behind in technology, is now working to become a leader in digital innovation. Saqib was direct in saying that Pakistan is being “reborn” and is now “powered by its youth, made stronger by need, and led by a new generation of leaders in technology.” Those are fighting words in the world of national digital strategies.

But here’s the surprising part: Pakistan currently has over 40 million crypto wallets and says it is one of the biggest freelancer economies in the world. While India puts up new rules and raises taxes on cryptocurrencies, Pakistan is quietly growing its crypto infrastructure. They are using 2,000 megawatts of extra electricity for both Bitcoin mining and AI data centers. That is not only planning; it is also carrying out the plan.

Why India Needs Immediate Action on Crypto Regulatory Framework

Right now, India’s crypto situation feels like watching a Bollywood drama at a very slow pace—there’s a lot of suspense, but the ending never arrives. For years, the country has been unable to pass new laws, which has led to confusion, heavy taxes, and missed chances.

The 30% crypto tax in India has already driven a lot of traders and investors out of the country to look for other countries with better tax laws. Indian youth, who play a large role in the crypto world, are seeing Pakistan give its support to crypto while they continue to face uncertainty in their own country. It’s similar to getting invited to a party, but your parents always warn you they’ll ground you if you attend.

Where India Currently Stands

India is facing this crisis at a very bad time. Sumit Gupta from CoinDCX recently shared that the Financial Stability Board is currently conducting a review of how countries regulate cryptocurrencies, and the report will be released in October 2025. India may not keep up with global crypto policies, while Pakistan follows international guidelines.

The big problem that no one is talking about? Pakistan’s strategy is not being carried out alone. Because US President Donald TRUMP is pro-crypto, Pakistan is now joining a larger group of countries that support cryptocurrencies. India, at the same time, keeps treating crypto as the family member you’re not sure you want to invite to get-togethers.

By hesitating, India is missing the opportunity to become the Web3 capital of the world, which Pakistan is now trying to achieve. Since India has a large number of tech experts and is entrepreneurial, this should have been an obvious choice. On the other hand, the lack of clear rules is pushing companies to develop and invest in other countries.

Final Thoughts

The battle between India and Pakistan over crypto adoption is more about securing a leading role in the future economy than just using digital currencies. The difference between Pakistan’s quick action on crypto and India’s slow progress is not only about policies; it points to a basic change in how the countries approach new ideas, innovation, and risks.

India stands at a very important turning point. It can either realize that crypto is here to stay and should be regulated, or it can see its neighbor take the regional crypto crown. The decision is obvious, but time is running out. Being slow in the world of cryptocurrency can be extremely harmful.

Also read: Bitcoin Adoption Race: How the U.S. is Dominating and Who Are Close Behind?