In a striking departure from traditional geopolitical maneuvering, Pakistan has chosen to embed cryptocurrency and blockchain infrastructure at the core of its national strategy. What may appear as an innovative financial reform is a calibrated effort to reorient the country’s leverage in global affairs, bypass conventional oversight, and bolster its military-industrial apparatus with digital opacity. The recent collaboration with World Liberty Financial (WLF), a crypto firm linked to the Trump family, underscores Pakistan’s intent to harness decentralized finance (DeFi) as a shielded tool of strategic autonomy.
The Deal That Changed the Game. On 26 April 2025, Pakistan’s Pakistan Crypto Council (PCC) signed a Letter of Intent with World Liberty Financial. The agreement aims to:
- Integrate blockchain into the national financial infrastructure.
- Develop stablecoins for remittance and trade.
- Tokenize state-held assets (including land, mineral resources, and potentially military logistics)
- Operate within a “regulatory sandbox” that shields these operations from traditional oversight.
Zachary Witkoff, co-founder of WLF, led the delegation that met with Prime Minister Shehbaz Sharif and General Asim Munir. The Trump family owns 60% of WLF, so the U.S. delegation’s involvement has raised eyebrows across diplomatic and security circles globally (NDTV, 2025).
Crypto as Strategic Infrastructure. Unlike India and most democratic economies, where blockchain is cautiously integrated under regulatory watch, Pakistan’s use of crypto is more tactical than technological. By embedding financial tools in military supply chains, land registries, and potentially arms procurement routes, Pakistan has redefined crypto as a national infrastructure rather than an innovation.
Tokenization of military stockpiles and strategic assets allows for:
- Silent movement of high-value commodities
- Covert funding of ISI-linked networks and non-state actors
- Bypassing FATF scrutiny by operating within “legally protected” sandboxes
Alternative to IMF conditionalities and Western financial oversight
U.S. Interests and the Trump Family’s Stake. World Liberty Financial is a crypto firm co-founded by Trump associate Zachary Witkoff and backed heavily by Trump family entities. Eric Trump and Donald Trump Jr. reportedly own significant stakes in WLF, with 75% of token revenue funneled into family trusts (Business Today, 2025).
The U.S. angle is unmistakable. Trump-era diplomacy often prioritized transactional relationships over long-term commitments. Through WLF, a strategic crypto pipeline has been opened in South Asia, giving the Trump family:
- A pressure point to counterbalance Indian influence
- A financial foothold in a vulnerable ally
- A low-visibility mechanism to support regional actors without public accountability
FATF and Global Transparency at Risk. Pakistan has been grey-listed by the Financial Action Task Force (FATF) for years over terror financing and a lack of transparency. While it was removed in 2022, the current crypto pivot risks a relapse. The regulatory sandbox mechanism being used by Pakistan provides:
- Exemption from real-time audits
- Non-disclosure clauses for pilot crypto instruments
Freedom to engage offshore platforms for funding and transactions
These are serious violations of the spirit, if not the letter, of FATF protocols. Moreover, with tokenized funding mechanisms and DeFi rails used by the state, the FATF’s oversight tools could be ineffective unless adapted rapidly.
Strategic Implications for India: India must recognize that future threats may not arrive via tanks or jets but through wallets and tokens. This crypto-enabled ecosystem in Pakistan could:
- Finance asymmetric warfare and digital espionage
- Mask capital inflow from adversarial state actors
- Undermine traditional sanctions and cross-border monitoring
- Create deniability in covert operations
India must invest in blockchain intelligence, develop sovereign DeFi protocols, and push for a FATF working group on crypto-military convergence to counter Pakistan’s strategy.
Regional Crypto Adoption and Implications for India. India currently leads global crypto adoption rankings, but it’s not alone in the region:
- Pakistan ranks 8th globally in crypto usage and has institutionalized blockchain through its Crypto Council.
- Bhutan has leveraged its hydropower surplus for large-scale Bitcoin mining, with crypto holdings worth over $600 million, around 30% of its GDP.
- Bangladesh prohibits crypto entirely, citing AML concerns.
For India, this landscape presents both opportunities and challenges:
- Security Risks from untraceable transactions used by hostile actors
- Economic Competition from crypto-rich neighbours like Bhutan
- Regulatory Arbitrage as nearby nations exploit sandbox models to circumvent global compliance norms.
- Diplomatic Complexity, especially with U.S. crypto firms engaging Pakistan
To counter this, India must:
- Enhance blockchain forensics and intelligence infrastructure.
- Promote the digital rupee as a sovereign crypto alternative.
- Collaborate internationally to push crypto transparency standards.
- Push FATF to include crypto-military convergence in its compliance parameters.
Expanding the Scope
The Next Digital Cold War? Pakistan’s move to weaponize digital finance has broader implications that go beyond the subcontinent. The quiet rise of crypto geopolitics mirrors the early Cold War years when ideological battles were fought through proxy states. Today, digital currency networks, private DeFi protocols, and sovereign wallets could become the new battlegrounds of influence.
If states begin leveraging blockchain as an opaque ecosystem to fund operations, manage sanctions, and route clandestine resources, we may be entering an era of financial warfare in which traditional diplomacy, treaties, and monitoring mechanisms are rendered obsolete. This raises urgent questions about how international institutions will keep pace with such stealthy transformations.
India, as a major regional power and a voice for democratic digital governance, must safeguard its interests and shape the future architecture of global crypto regulation. India must take the lead in advocating for an international convention on digital financial warfare, akin to a Geneva Protocol for blockchain, to prevent states operating beyond its borders from rewriting the rules of engagement.
Conclusion
Not Just a Digital Deal, but a Strategic Pivot. Pakistan has made its choice. In the name of national interest, it has embraced crypto not as an economic reform but as a covert enabler of statecraft. The handshake between WLF and Pakistan’s military-political elite signals a new axis of untraceable influence in South Asia. India and the international community must now decide how to respond to this invisible theater of war.