The State Bank of Pakistan (SBP) has not demonstrated any willingness to be flexible and permit any institution to launch their cryptocurrency companies in Pakistan.
The banking regulator issued a warning to all regulated firms asking them not to process, use, trade, hold, transfer value from, promote, or invest in virtual currencies and tokens.
SBP Position on Cryptocurrencies Trade
The SBP repeated its position on cryptocurrencies in the special section of the Financial Stability Review, stating that no person or organization is authorized or licensed to issue, sell, buy, exchange, or invest in any such virtual currencies (VCs)/coins/tokens in Pakistan.
SBP released a circular in 2018 warning the public that cryptocurrencies were not issued or guaranteed as legal cash by the Pakistani government.
Therefore, it upheld its decision to continue prohibiting activity by a company that says it offers bitcoin trading or investment.
Although Pakistan’s banking regulator and the government decided to outlaw cryptocurrency trading, investors and traders in the digital currency have started a legal battle to ensure its legitimacy through a number of well-known cryptocurrency operators.
Global authorities have not yet fully addressed the phenomena of cryptocurrencies or decided on a collective strategy for this innovation, according to an analysis of global practices.
It is still an area where more regulatory clarity is needed, from conceptualization through definition and prospective applications.
Leading nations that have banned cryptocurrency include Algeria, Morocco, Tunisia, and China. Pakistan was on the list of nations that had an implied restriction, along with Saudi Arabia, Bangladesh, Turkey, and Indonesia. US, India, Germany, France, England, Japan, and the Russian Federation are permitted. The only nation that accepts cryptocurrencies as payment is El Salvador.
SBP outlined the justification for its strongly recommended prohibition on cryptocurrency trade and investment in Pakistan in the most recent Financial Stability Review.
To read our blog on “SBP is preparing to issue Pakistan’s 1st digital currency,” click here.
