- According to a document submitted to the Sindh High Court, the Securities and Exchange Commission of Pakistan (SECP), the Federal Investigation Agency of Pakistan (FIA) and the State Bank of Pakistan (SBP) feel that cryptocurrencies could bring in the element of risk and could be used for illegal purposes.
- The status of cryptocurrencies has been in limbo following a proper absence of regulations in terms of cryptocurrencies in the country.
- Recently, the Pakistan administration launched a full-fledged investigation against the world’s largest exchange Binance in an alleged US$100-million scam.
Pakistan has become the latest country that is contemplating a cryptocurrency ban. As the world is increasingly staring at the moment where cryptocurrencies will be regularised in the near future, Pakistan, for now, is quite happy to keep both the options of a blanket ban as well as crypto regulations open, keeping the investors on the edge of their seats.
According to a document submitted to the Sindh High Court, the Securities and Exchange Commission of Pakistan (SECP), the Federal Investigation Agency of Pakistan (FIA) along with the State Bank of Pakistan (SBP) feel that cryptocurrencies could bring in the element of risk and could be used for illegal purposes.
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The status of cryptocurrencies has been in limbo for some time now mainly due to the absence of proper regulations in the country. But of late, there have been flurry of activities within the nation, following which the SECP is making sure to wipe out the possibility of using cryptos in the country.
According to Chainalysis Global Crypto Adoption Index, Pakistan happens to be the third-highest country in crypto adoption, and this news will severely dent the crypto environment in the country.
Recently, the Pakistan authorities had launched a full-fledged investigation against the world’s largest exchange Binance in an alleged US$100-million scam. It was alleged that fraudulent apps such as HFC, MCX etc. duped millions from Pakistani investors. The Pakistani authorities took the matter in their own hands and sent a notice to Binance asking for an explanation on the same.
Clarity for the first time
It is assumed that it is for the first time such a stance on cryptos has been taken by a central bank. In fact, the SECP issued a notice in 2018, wherein it prohibited banks to deal with the crypto exchanges that operate in the country.
Many leading industry members believe that the common tendency of authorities is to go for a blanket ban, but here a blanket ban may not resolve the problem. Many believe regulations could bring in some sort of semblance and cryptocurrencies could co-exist along with the traditional mode of payments.
Pakistan is not alone
In 2021, the People’s Bank of China (PBOC) banned all forms of cryptocurrency-related activities in the country stating that they won’t be a part of the payment system and the likes of Bitcoin, Ethereum, etc. cannot be circulated in the market. Later, China’s economic planning agency started to weed out crypto mining companies, following which several mining companies had to leave the country for greener pastures. This had a catastrophic effect on the crypto market and was one of the major reasons for the crypto crash in the month of September.
Later in November, the head of Sharia compliance in the world’s largest Islamic count said that Muslims of Indonesia cannot trade in cryptocurrencies.
Well, the crypto policies in Pakistan in the next few weeks will certainly be crucial for the whole crypto market. Whether Pakistan bans cryptos or regulates them, it will certainly influence the global crypto market considering that Pakistan is one of the major markets for crypto adoption.
Overall, it is important that the Pakistan government and the financial system decide on the regulations in a bid to safeguard investors’ interests.