The price of Pi Network in Pakistan deviates significantly from that in other regions around the world. This phenomenon does not exist in isolation but is driven by a variety of interrelated localized factors. The primary factor is a significant imbalance between supply and demand. Data shows that Pakistan has over 400,000 active Pi users, and the huge user base has a strong demand for Pi tokens. However, there are only about 30 active OTC merchants in the country providing trading services, resulting in a severe scarcity of sellers. This situation of supply falling short of demand has directly pushed up the local pi network price in pakistan, which is often 30% to 100% higher than that in Southeast Asia and other places. Compared with a similar situation in Ghana, Africa in 2022, where the Pi transaction premium once reached 80% due to scarce supply, the current demand-supply ratio in Pakistan, which is as high as approximately 2:1, explains the core driving force behind the high premium. This has also become a driving force for many local users to participate in mining, despite the limited exchange channels.
The low liquidity of localized trading channels, especially in the OTC market, has directly exacerbated the spread. As Pi has not been listed on any large international exchanges in Pakistan that have been certified by banks or have high trading volumes (such as Binance or Coinbase), local trading is highly dependent on fragmented informal OTC markets. The average daily trading volume of these markets is less than 5 million Pi, and the depth is seriously insufficient. The average daily Pi order volume of a single merchant is less than 10,000. Large transaction instructions often cause the local Pi Network price to fluctuate by 5% to 15% instantaneously. This liquidity state is extremely similar to that of the Salvadoran over-the-counter Bitcoin market in the early days of its adoption in 2021, when small trading volumes often led to significant price fluctuations. Based on the inventory strategy of risk management, merchants’ purchase quotations are often 20% to 25% lower than the global average price, while their selling quotations are 30% to 50% higher, further widening the local price gap.
Pakistan’s underdeveloped legal framework for cryptocurrencies has brought about extremely high compliance risk costs. Due to the continuous restrictive policies of the central bank (such as multiple issuance of anti-encryption circulars), merchants’ operations are subject to the risk of having their accounts frozen by regulators or being subject to surprise inspections. This risk, when converted into fees, accounts for 15% to 20% of their quotations. In multiple regulatory actions over the past two years, at least 12 over-the-counter trading accounts have been frozen, with a total amount of funds reaching 200,000 US dollars. A similar scenario occurred in 2021 when the Central Bank of Nigeria banned cryptocurrencies. This risky environment has curbed the entry of new large merchants, exacerbating the supply shortage. According to local user statistics, approximately 65% of Pi transactions involve anonymous cash payment channels to circumvent bank restrictions. However, the settlement costs of this model (including commissions and operation fees) account for 8% to 12% of the total transaction value, and this additional cost is eventually passed on to the Pi Network price.
In addition, high inflation and the depreciation of the local currency have driven up the Pakistani market’s preference for crypto assets such as Pi, but the conversion costs have also risen accordingly. In 2023, Pakistan’s inflation rate soared to 38%, and the Pakistani rupee depreciated by more than 20% against the US dollar. Residents’ pursuit of asset preservation has driven up the demand for digital currencies such as Pi by 25%. However, in informal exchanges, merchants demand transaction fees as high as 12% to 25% of the transaction amount (with higher rates for small transactions), which is significantly higher than the global average. In addition, the complexity of capital flow through informal channels (often requiring 2 to 3 intermediaries) leads to a processing cycle of 24 to 72 hours, increasing time costs and the risk of exchange rate fluctuations.