The federal government and Pakistan’s central bank have decided to ban the use of all cryptocurrencies and take action against crypto exchanges, according to a new report.
The report submitted to the Sindh High Court (SHC) on Wednesday mentaioned that the government and State Bank of Pakistan are urging an outright ban on transacting in all cryptocurrencies in the country.
The status of cryptocurrencies in Pakistan had been thus far in limbo and for the first time, the central bank has taken a clear position on the future of cryptocurrencies by urging the SHC to not only ban the blockchain based digital currency but also impose penalties against crypto exchanges.
On October 20 of last year, SHC told the federal government to regulate cryptocurrencies within three months. The court directed the government to form a committee headed by the federal secretary of finance to determine the legal status of cryptocurrencies.
The court had instructed the authorities to come up with a report on the use of cryptocurrencies. The report was submitted to the Sindh High Court on Wednesday.
In April 2021, SBP Governor Raza Baqir had said the central bank is studying cryptocurrencies and their potential for bringing transactions happening off the books into a regulatory framework.
In an interview with CNN’s Julia Chatterley, he said, “We are studying that [Central Bank Digital Currency] very carefully.”
The report also refers to the recent investigation by the FIA against crypto exchanges such as Binance and OctaFx and the risk these exchanges posed for the investors.
As in many countries across the world, with the exception of China and a few others, regulation on cryptocurrencies is generally vague until most can figure out what to do with them.