Pakistan does not usually set global trends. Yet its recent flirtation with crypto diplomacy offers a telling glimpse of geopolitics in relation to American power may be mutating.

Within a matter of hours, Pakistan made two apparently separate moves. First, it joined the top table of the Trump led “Board of Peace”, a hazy diplomatic initiative, framed as a potential replacement for the United Nations. A day earlier, Islamabad had signed a lucrative deal with World Liberty Financial - described by Reuters as the Trump family’s main crypto vehicle - to fund a dollar-linked stablecoin, USD1, for payments and cross-border transfers.

There was a denial of any connection and no official suggestion that crypto experimentation buys diplomatic access. Yet the sequencing is striking. Pakistan, chronically short of dollars and long reliant on external goodwill, finds itself welcomed into a political forum shortly after agreeing to pilot a private digital dollar tied to the US President.

This is not classic statecraft. But it is very Trumpian. Mr Trump has little affection for institutions, processes or multilateral etiquette. He prefers leverage, loyalty and deals. Stablecoins fit neatly into that worldview. They project dollar influence without Congress, the IMF or awkward conditions. The state steps back; friendly firms step in.

For Pakistan, the calculus is unromantic. The rupee is weak, capital controls bite and remittances matter. A digital dollar - whatever its political parentage - promises efficiency and credibility. It is less an ideological embrace of crypto than a search for functioning money.

Sceptics will bristle at the optics. Private coins blur the line between diplomacy and corruption. Trust in issuers and reserves is hardly assured. Yet this is precisely the point. Influence is becoming less institutional, more transactional.

Pakistan’s case does not prove a quid pro quo. But it suggests a direction of travel. In an America where politics and business mingle freely, access- to dollars, to forums, to favour - may increasingly run through private rails rather than public ones.

Markets have a habit of rhyming. In recent years, one curious echo has emerged: crypto prices often seem to stir when defence stocks do. At first glance, the pairing looks odd - one forged in code, the other in steel. Yet the logic is less far-fetched than it appears.

Start with fear. Defence stocks rally when the world feels less safe: wars widen, alliances strain, budgets swell. The same atmosphere unsettles faith in money, borders, and institutions. In that climate, investors reach for hedges - gold, dollars, and increasingly Bitcoin. Not because crypto is safe, but because it sits outside the system that appears to be fraying.

Then there is state spending. Surging defence budgets mean deficits, debt issuance, and - eventually - pressure on currencies. Markets may not price in inflation immediately, but they sniff out direction. Crypto thrives on the suspicion that governments will choose debasement over discipline. A rally in Lockheed Martin or BAE Systems is, in that sense, a quiet advert for Bitcoin’s long-term pitch.

There is also portfolio plumbing. Large funds increasingly treat crypto as a “risk hedge” - not against volatility, but against regime change. When geopolitical risk rises, allocations spread. Defence stocks absorb one side of that trade; crypto absorbs another. Different assets, same anxiety.

Sceptics will note the correlation is loose, episodic, and hardly scientific. Fair enough. Crypto still behaves like a risk asset when liquidity dries up. But over longer arcs, both defence shares and digital coins feed on the same soil: distrust, fragmentation, and the sense that the post-Cold War order is slipping.

When missiles fly, money looks for exits. Some buy tanks. Others buy code.

If you believe the headlines, crypto is a shadowy superhighway for crime. Drug lords, hackers and kleptocrats all tapping away at laptops, laundering billions in digital coins. It makes for a tidy story. It just isn’t very true.

Start with the numbers. The best estimates from blockchain analysts put illicit crypto activity in the UK at well under 1% of total transaction volume. That figure rises and falls year to year, but it has never come close to dominating the system. By contrast, traditional finance quietly processes the vast majority of global crime money without attracting the same moral panic.

This matters because scale distorts perception. Yes, criminals do use crypto. They use whatever works. For ransomware gangs, online scams and sanctions dodging, digital assets can be quick and convenient. But these are niche, tech-native crimes. For everything else - drug trafficking, human smuggling, corruption, tax evasion - cash, banks, shell companies and trade fraud remain king.

Even the United Nations’ own estimates suggest 2-5% of global GDP is laundered each year. Almost all of it flows through conventional financial channels, not blockchains. That’s not because crypto is too small. It’s because it’s too visible. Public ledgers are a terrible place to hide large, long-term criminal empires.

Ironically, crypto’s reputation for lawlessness rests on a misunderstanding. Transactions are traceable, permanent, and increasingly well-policed by firms like Chainalysis. Once an address is linked to a crime, the trail rarely ends. Cash leaves no such record.

The real story, then, is not that crypto is crime-free. It isn’t. But neither is it the criminal economy’s backbone. That honour still belongs to the boring old financial system - overseen, regulated, and repeatedly exploited.

Crypto’s problem isn’t that criminals love it. It’s that everyone else is still learning how little they do.

Conviction is thin. Macro headlines linger but lack bite; the Federal Reserve still caps risk appetite. No urgency to force trades. Preserve capital, wait for clearer asymmetry.