In a recent session of the Senate Standing Committee on Finance and Revenue, Minister of State for Finance Aisha Ghaus Pasha announced that Pakistan will move towards banning cryptocurrency services and never legalize crypto trading. This declaration has been met with mixed reactions, with some officials in favor, while others expressing disapproval due to its potential impact on the country’s economy.
The ban on cryptocurrency has been viewed as a means to meet the Financial Action Task Force (FATF) requirements, which removed Pakistan from its gray list in October. Countries within the gray list are deemed to have insufficient Anti-Money Laundering and Countering Terrorism Financing (AML/CFT) measures, but are actively working to address them.
The State Bank of Pakistan (SBP) and the Information and Technology Ministry are drafting legislation for the ban. It’s worth noting that Pakistan’s president has called for more training in blockchain technology, while the government plans to introduce a central bank digital currency by 2025 and has recently adopted a national blockchain Know Your Customer (KYC) platform.
Despite these efforts towards financial inclusion, the Pakistani Crypto Twitter community has voiced strong disapproval for the impending ban. Users argue that the government should focus on eradicating scams and illicit apps, which trap people into losing their funds. Some users also point out that many citizens have made significant income through crypto trading, and implementing a ban would take away a critical income source for the country’s poor population.
While the FATF cannot impose sanctions on noncompliant countries, their findings carry significant weight and could influence government policies worldwide. With Pakistan’s economy in deep crisis and undergoing tense bailout negotiations with the International Monetary Fund, a clean report from the FATF might be a political priority.
Crypto adoption in Pakistan has been fairly high, with citizens reportedly holding $20 billion worth of crypto in 2021. However, the government’s opposition to crypto is not a new development, as the SBP has allegedly been seeking a ban since at least January.
In conclusion, Pakistan’s move towards banning cryptocurrency services and trading stirs a conflict between meeting international AML/CFT requirements and upholding the economic well-being of the country. While some officials believe this is a necessary step for Pakistan, others argue that it could deprive citizens of a significant income source and hinder economic growth. With the crypto ban legislation in progress, the course of action Pakistan chooses will be crucial in determining its financial future.
Source: Cointelegraph
