After a long history of rejecting this technology, Pakistan is now moving to legalize it Cryptocurrency And blockchain. In 2023, Pakistan was one of many countries that had a strict policy on the use of cryptocurrencies and blockchain technology.
Ayesha Gaus Pasha, the Minister of State for Finance and Revenue, even publicly stated that she would “never legalize” cryptocurrencies in the country.
Today, that policy is about to change with the Pakistani government approving a proposed amendment to the State Bank of Pakistan (SBP) Act, allowing the country’s premier bank to issue its first digital currency.
Major Shift in Pakistan’s Cryptocurrency Policy
the Reports The Express Tribune Government sources indicated a shift in the current administration’s policy. Plans have now been made to amend the SBP Act, one of the aims of which is to allow the state bank to add a digital currency.
The SBP has been consistent in its policy of no Adopting digital currency It has constantly posted warnings about its use and promotion. Under the current proposal, the government and traditional financial institutions could add a digital currency.
The idea is to promote a central bank that can manage the country’s finances both physically and digitally.
Pakistan and its history of banning cryptocurrencies
The State Bank of Pakistan has traditionally led the opposition against the use of cryptocurrencies, citing their volatility and difficulty of regulation.
In 2018, the Reserve Bank of Pakistan issued an order prohibiting banks and other financial institutions from providing services to cryptocurrency exchanges or handling cryptocurrency-related transactions. A 2018 order specified that popular cryptocurrencies such as Ethereum and Bitcoin are not legal tender in Pakistan.
In the same order, the country’s top financial policymakers explained that because cryptocurrencies provide a high degree of anonymity, they may be used by bad actors for illicit activities. Due to this SBP order, cryptocurrency activities in Pakistan were limited, preventing cryptocurrency exchanges from doing business.
Ban cryptocurrencies to avoid ‘graylisting’
The government’s primary Unwillingness to approve cryptocurrencies Transactions are bound by conditions imposed by the Financial Action Task Force (FATF).
According to the task force, Pakistan will not be included in the “grey list” if it does not legalize cryptocurrencies like Bitcoin. With this order, state banks issued orders to local banks and financial institutions to inform their customers. In addition, transfers from foreign exchanges are also not allowed as they are illegal and risky.
If the proposal is approved, the government will introduce amendments to Article 24, which focuses on the issuance, regulation and management of digital currencies. Under the State Bank of Pakistan Act, only the State Bank of Pakistan can issue a digital currency and make it legal tender.
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