Urdubit is the first and biggest Pakistani Bitcoin Exchange, in this interview, we talk to the company’s founders Danyal Manzar and Zain Tariq about the implications of running a Bitcoin exchange in Pakistan, they are also announcing a partnership with Bitwage to allow Pakistani’s Freelancers to receive and exchange Bitcoins.
Urdubit was the first Pakistani Bitcoin exchange, and its operating since October 11, 2014, its main goal is to help people in Pakistan to easily trade their Bitcoins. Urdubit is operating over Blinktrade’s platform and engine.
We contacted the operators of this Pakistani Bitcoin exchange and asked them some questions, we began by digging up the motivations behind creating and operating a Bitcoin exchange, Zain Tariq told us that he learned about Bitcoin in 2012 and it gained his attention, indeed, he realized the huge potential that it offered for a market like Pakistan -which accounts for $16 billion per year in remittances-
This resulted in the creation of Bitcoinpk, which besides serving as a bitcoin education portal also served as an Over-the-counter exchange in Pakistan.
Danyal Manzar came to meet with Zain Tariq and they decided to start a web-based Bitcoin ATM using the now defunct Coinsafe, this bad experience enabled Zain and Danyal to realize that a locality based service was not the answer, they contacted Blinktrade and decided to provide a full orderbook-based trading platform.
Setting up a Bitcoin exchange in Pakistan was not all that easy, asked about the challenges at the beginning Zain stated:
Trust and awareness were the main challenges we faced. Pakistani market was subject to high scam rate and exchangers were charging high fees on over the counter trades. Seeing this people did not know about us or were not willing to trust us with their data specifically because we follow strict KYC.
Urdubit has a low transactional volume compared to other exchanges, however, Zain tells us that it is more than enough for the small but active Pakistani market.
The transaction volume has seen a steady growth and we have now done over $600,000 since we started, we roughly do 6 BTC daily now, and considering the small market we have in Pakistan that is a huge number.
The fee schedule is pretty much straightforward, the exchange charges a flat 0.75% trade fee and the FIAT deposits and withdrawals fees are 1%. Know your customer policies are very strict:
While a user can register and begin trading in bitcoin and cash out via btc anytime, it is required for the user to verify their account if they want to deposit fiat.The following things are required for Verification1. Selfie with Government Issued ID (Passport, CNIC or Bfourm)2. Close up of the ID provided with selfie.3. Paid utility bill or bank-statement or driver license (as proof of residence).
As published by State Bank of Pakistan only 16% of Pakistani have a bank account and from that about 4% dont have access to branch banking (using expensive mobile banking). Bitcoin has huge potential as Pakistan produces the 3rd largest freelancers in the world while having no payment gateway such as Paypal. Since the banking is not wide spread the use of credit cards is very little, which also has effects on sales for eCommerce website. Bitcoin provides a complete solution for the entire nation by letting Pakistanis connect to the global economy.
Right now the government is not that active in the bitcoin space in Pakistan. I think its more of wait and see kind of game. Pakistani market usually follows international market trends rather then setting them.
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