As a researcher who has closely followed the evolution of cryptocurrency regulations worldwide, I must admit that the recent developments in Pakistan have caught my attention. After years of staunch opposition to cryptocurrencies and blockchain technology, it’s fascinating to witness this major policy shift.
Previously resistant to embracing it, Pakistan is now shifting towards making cryptocurrencies and blockchain technologies legally acceptable in 2023. In the past, Pakistan had been among the nations with strict regulations against crypto usage and blockchain implementation.
In simple terms, Aisha Ghaus Pasha, who is the Minister of State for Finance and Revenue, openly declared that there are no plans to make cryptocurrency legal within the country.
Today marks a significant shift as the Pakistani government gives its approval for an amendment to the State Bank of Pakistan (SBP) Act, paving the way for the country’s central bank to introduce its inaugural digital currency.
Pakistan’s Major Policy Shift On Crypto
According to reports from The Express Tribune, there are indications that the current administration is considering a change in policy. These plans involve amending the State Bank of Pakistan (SBP) Act, with the aim of enabling the state bank to introduce a digital currency.
In simpler terms, the Monetary Policy Authority (SBP) has maintained its stance against the introduction of digital currencies, repeatedly issuing cautions regarding their usage and marketing. However, under the present plan, the administration and conventional banking systems may incorporate a digital currency option.
The idea is to promote a central bank that can manage the country’s finances physically and digitally.
Pakistan And Its History Of Crypto Prohibition
Historically, Pakistan’s central bank has been a vocal critic of using cryptocurrencies, citing their unpredictable nature and complications in regulatory oversight as key concerns.
In the year 2018, the State Bank of Pakistan (SBP) enforced a decree prohibiting banks and other financial entities from facilitating crypto exchanges or dealing with transactions related to cryptocurrencies such as Ethereum and Bitcoin. The directive of 2018 clarified that these well-known cryptocurrencies are not recognized as legal tender in Pakistan.
The country’s top financial decision-makers pointed out that due to their high level of anonymity, criminals could misuse cryptocurrencies for illegal purposes. As a result of this directive by the State Bank of Pakistan (SBP), the use of cryptocurrencies in Pakistan has been restricted, effectively halting crypto exchange operations within the country.
Banning Crypto To Avoid ‘Grey List’
The government’s initial reluctance to approve cryptocurrencies for transactions is connected to the conditions imposed by the Financial Action Task Force (FATF).
The task force has indicated that Pakistan could avoid being placed on its “grey list” if it does not make cryptocurrencies like Bitcoin legal. As a result, state banks have instructed local banks and financial institutions to alert their clients about this issue. Furthermore, remittances from foreign exchanges are currently prohibited because they’re considered illegal and risky.
Should the proposition be approved, the administration intends to make alterations to Section 24, primarily dealing with the creation, oversight, and management of digital currencies. As stipulated under the State Bank of Pakistan Act, it is only the State Bank of Pakistan that has the authority to release a digital currency and declare it as legal tender within Pakistan.
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2024-11-05 21:11