The State Bank of Pakistan is contemplating a complete ban on crypto assets. The institution notes that cryptocurrencies present certain risks, and is even referred to countries like China that have banned these assets.
The central banking institution is working with the Federal government on contemplating this ban that could eradicate the use of Bitcoin and altcoins from the territory of Pakistan.
Pakistan recommends ban on crypto
The authorities in question gave several reasons why cryptocurrencies should be banned. The first is that cryptocurrencies are not legally recognized; thus, these assets cannot facilitate trading activities.
The institution further noted that cryptocurrency exchange platforms in Pakistan exposed investors to various risks. One of the exchanges dominating in Pakistan is Binance. Binance is the largest exchange platform globally by trading volumes, and over the past year, it has faced a series of regulatory crackdowns.
The central bank noted that it was willing to stop the operations of these crypto exchanges by imposing penalties and fines. This has happened in several countries that have required crypto trading platforms to comply with local laws.
The State Bank of Pakistan also pointed to the increased use of cryptocurrencies to finance illegal operations. The institution noted that these currencies could facilitate terrorism and money laundering. However, various jurisdictions have addressed this issue that has required exchanges to have KYC measures in place to prevent illegal transactions.
The recent recommendation for a crypto ban comes after the Sindh High Court required the government to introduce a crypto regulatory framework in three months. After the lapse of the three months, the institution has come up with this ban, with the court expected to hear the case on April 12.
Not the first ban on crypto
This is not the first time Pakistan is proposing a total ban on cryptocurrencies. In April 2018, the State Bank of Pakistan advised financial institutions, including banks and payment processing companies, to stay away from crypto-related services.
However, this ban did not stop Pakistanis from using crypto assets. In 2020, the ban was questioned by Justice Muhammad Iqbal Kalhoro, who noted that it could prevent the country from evolving technologically.
Pakistan has recorded a surge in crypto trading volumes over the past year. In 2021, interest in cryptocurrencies among Pakistanis increased by over 711%. Locals are believed to own around $20 billion worth of cryptocurrencies.
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