Cryptocurrencies: Macro financial Risks and Policies in Pakistan

Abstract

This study investigated the macrofinancial risks posed by cryptocurrencies and potential policies to mitigate these risks in Pakistan. A mixed-methods approach was employed, utilizing quantitative data analysis and qualitative policy evaluation. The quantitative analysis examined the impact of cryptocurrency market capitalization on key macroeconomic indicators using regression models and simulated data. The qualitative analysis involved a critical evaluation of existing and proposed cryptocurrency policies in Pakistan. The findings revealed a significant relationship between cryptocurrency market capitalization and indicators such as inflation, exchange rates, and capital flows. Policy recommendations include implementing robust regulatory frameworks, enhancing cybersecurity measures, and promoting public awareness campaigns. This research contributes to the understanding of cryptocurrency-related financial stability risks and informs policymakers in Pakistan about effective strategies to address these challenges.

Keywords: cryptocurrencies, macrofinancial risks, policies, Pakistan, financial stability