The federal government and the ‘State Bank of Pakistan’ are pushing for a total ban on transactions in all cryptocurrencies. This is according to a report submitted to the Sindh High Court (SHC) on Wednesday.
The central bank is against cryptocurrencies
In many countries around the world, the regulations on cryptocurrencies are generally vague. The same can be said of Pakistan. Here, until now, regulation on trading and owning cryptocurrencies has been absent. However, the SHC wants to change this. It instructs the federal government to impose regulations within the next three months.
According to an article from the Pakistani website Samaa the court instructed the government to form a committee. This committee will be overseen by the Federal Minister of Finance. This committee should work on a legally regulated structure for cryptocurrencies.
The Pakistan Central Bank has spoken out resolutely against cryptocurrencies in its report. In the report, the bank recommends banning crypto assets. In addition, sanctions are imposed on all exchanges that transact in it.
The SHC has ordered that the report be sent to the Ministries of Finance and Law. The goal is to get their input on how to frame the status of crypto assets legally. This happened after the central bank’s recommendation to declare cryptos illegal.
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Crypto is almost unstoppable
The State Bank of Pakistan appears to be walking the same anti-crypto path followed by China. The bank also says that virtual currencies are used for money laundering and terrorist financing.
As the bank is investigating the possible use of a central bank’s own digital currency, it is obviously not happy with competition from private forms of this currency. Undoubtedly, it’s also one reason the bank is recommending a total ban on private digital assets.
A ban will not go down well with many investors in Pakistan. According to Nasir Hayat Magoon, the country has already invested around $20 billion in cryptocurrencies. Where all that value will go if there is a ban is certainly an interesting question.
A widespread ban in these states is likely to increase innovation in decentralized financing platforms. Many will want to use them to escape the restrictions and threats to the freedoms that central bank digital currencies will impose.