The Pakistani authorities has recently made it clear that it will put a stop to all online cryptocurrency services within the country as a measure to prevent illegal digital currency transactions. The Senate’s Standing Committee on Finance has resolved to make cryptocurrency services inaccessible through the internet in Pakistan.
The committee was informed by Dr. Aisha Ghaus Pasha, the Minister of State for Finance and Revenue, that there are no intentions to legalize cryptocurrencies in Pakistan. This decision comes after the State Bank of Pakistan’s suggestion to ban cryptocurrency due to its potential adverse effects on the country’s financial system.
Pakistan Banning Crypto
The Senate Standing Committee on Finance was informed by Dr Aisha Ghaus Pasha, that the State Bank of Pakistan (SBP) and the Ministry of Information Technology are making efforts to comply with the federal government’s orders to ban cryptocurrencies.
Pakistan has recently witnessed a rise in cryptocurrency trading and mining, with an increasing number of social media videos and online exchange transactions associated with it.
Pakistan has also experienced a significant increase in the mining of cryptocurrencies until April 2018 when the government enforced a prohibition on the trade and mining of digital currencies. Despite the closure of several mining facilities following the ban, the industry had been steadily expanding in the country.
The Reasons For The Ban
Pakistan’s recent move to ban cryptocurrencies is a result of various factors. The State Bank of Pakistan (SBP) and the federal government are concerned about the trading of cryptocurrencies by individuals and organizations, as it could result in the outflow of foreign exchange from the country. This could potentially cause capital flight and negatively impact the nation’s financial system.
In Pakistan, the utilization of cryptocurrencies has been met with disapproval from several authoritative entities. The SBP has conveyed uneasiness over the possibility of money laundering and terrorism financing that comes with crypto.
The government has echoed these concerns and has decided to impose a ban, citing the associated risks with trading Bitcoin and other digital currencies. Additionally, the FATF has also imposed specific mandates on Pakistan, which has resulted in several restrictions in crypto trading.