Aisha Ghaus Pasha, the minister of state for finance and revenue, declared that Pakistan would outlaw cryptocurrency services operating in the country and reaffirmed that the government has no plans to legalize cryptocurrency trading during a meeting of the Senate Standing Committee on Finance and Revenue on May 16.
This attitude has been featured in numerous local media stories, and other officials, such as the Director of the State Bank of Pakistan (SBP), Sohail Jawad, have supported the choice. This article examines Pakistan’s stance on cryptocurrencies and their effects on the local cryptocurrency market.
The declaration by Minister Aisha Ghaus Pasha underscores Pakistan’s steadfast opposition to cryptocurrencies and its choice to outlaw their use. The government is most worried about potential cryptocurrency threats, like money laundering, financing of terrorism, and illegal activity. Pakistan wants to reduce these risks and safeguard its financial system and populace by enacting a ban.
Pakistan’s move to outlaw cryptocurrency services is motivated by a number of issues. First of all, the decentralized and anonymous nature of cryptocurrencies creates difficulties for governmental supervision and raises questions about possible abuse. Additionally, investors face risks due to the volatility and speculative character of cryptocurrencies, which may result in financial instability. The government claims to protect its citizens from these dangers by limiting access to crypto services.
The prohibition on cryptocurrency services has also received the approval of the State Bank of Pakistan, the nation’s national bank. Among other officials, SBP Director Sohail Jawad has emphasized the necessity of preserving the stability of Pakistan’s financial system and the possible dangers posed by cryptocurrencies. The government’s decision to outlaw crypto services in the nation was further supported by the SBP’s support of that position.
The Financial Action Task Force (FATF), despite not having the authority to impose sanctions on non-compliant nations, has a considerable impact on corporate and governmental policy globally. Pakistan, which is undergoing an economic crisis and negotiating a bailout with the International Monetary Fund, may prioritise receiving a positive FATF evaluation. Both the FATF and the IMF have raised concerns over crypto numerous times.
Pakistan has experienced significant cryptocurrency adoption despite the government’s objections, with its residents reportedly having $20 billion worth of cryptocurrencies in 2021. Since at least January, the State Bank of Pakistan has been pushing for a cryptocurrency ban. However, Pakistan recently established a national blockchain ‘Know Your Customer’ infrastructure and aims to introduce a central bank digital currency in 2025.