A report by global cybersecurity firm Kaspersky says that there were over 33.3 million attacks on smartphones detected globally in 2024. Another report indicated that $3.8 billion had been stolen from crypto platforms in 2022. This adds up to bad news for Pakistan, which has been charging ahead with digitization of the economy, in which people would use their smartphones as banks. Pakistan was hoping that it would be able to get ahead of the curve through digitization. The prospect of transactions without paper money, of branchless banks, of e-wallets was beguiling, not just because of the convenience afforded the consumer, but the inclusivity it meant as people who would not open a bank account, now could get access to banking services, including the credit that would be such a gamechanger for so many. Unfortunately, it seems, criminals have already digitized. In the words of the adage, ‘even before the village was peopled, thieves reached it. The attacks are only increasing, being up 194 percent in 2024.
The whole basis of any banking system lies in its security. Perhaps more important than security itself, is the reputation for it. This is probably more now in the era of fiat currency than in that of bullion currency, with economic transactions being based on trust. Even with coined bullion, the users had to trust the mint that the coins it issued had the metal it said they had. The problem seems to be with the fact that the criminal has the initiative, because he is able to.devise means of overcoming whatever obstacle is placed in his way. No longer are bank robbers beefy men with guns in hand. Instead, they will be weedy nerds hunched before a computer screen. Coding will take the place of killing.
Pakistan’ plan to have a crypto rupee, or at least for the State Bank of Pakistan to hold some of assets in cryptocurrency, will depend on how secure the blockchain technology, on which it is based, actually is. One of the brakes on digitization is the innate conservatism of people, which is mostly the result of lack of technological knowhow. The inherent innovative spirit of the criminal will work against the banking system’s integrity, The need for currency to hve some physicl banking, such as bullion, may well re-emerge.
