Despite the Blanket Ban in 2018, Pakistan’s crypto regulations are currently being assessed by the SEC now that the country recognizes the importance of digital assets. Back in 2018, Pakistan was one of the countries where digital assets were blanket banned.
Recently, the State Bank of Pakistan (SBP) has stated that they did not impose a crypto ban in the country and was only misreported by the media. It was clarified that the bank informed the Sindh High Court about the use of cryptocurrencies but not to the extent of banning them. Additionally, Pakistan’s SEC issued a position paper on November 6 regarding the regulation of cryptocurrency trading platforms.
It stated there that the ministry of finance is considering making new laws to regulate cryptocurrencies. The SEC argues that the use of digital assets is the beginning of a new era in digital finance. However, plans for the creation of the Central Bank Digital Currency (CBDC) wasn’t mentioned in the report despite the announcement that the country will develop it by 2025.
The paper also highlights key concepts for the country’s digital finance market and established regulatory structures of other jurisdictions. SEC made it clear that the publication focuses solely on crypto-assets provided by non-governmental banks and not on digital currencies of central banks.
In April 2018, the SBP released a memo explaining the ban on transactions that involve cryptocurrencies or digital tokens in the country. The blanket ban covered all residents of Pakistan including companies and businesses.
‘The SBP has not authorised or licensed any individual or entity for the issuance, sale, purchase, exchange or investment in any such virtual currencies/coins/tokens in Pakistan,’ stated in its publication.
It also expressed the prohibition of banks from ‘processing, using, trading, holding, transferring value, promoting and investing in virtual currencies/tokens.’
No one was able to make crypto transactions since payments are made directly from a bank account or online wallet. This made it difficult for people to transfer money to other people outside the country.
By 2019, the government showed interest in regulating digital assets after it was announced that Electronic Money Institutions need a licensing scheme to check the activities made by users.
While there are still arguments regarding the adoption of cryptocurrency, the regulators are keeping their options open for the regulation of digital assets in the country.
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