Pakistan’s Crypto Dilemma: FATF Compliance vs Economic Benefits & Financial Inclusion

Pakistani Finance Minister & crypto decision, FATF grey list removal, troubled economy, soaring inflation, high unbanked population, 6th on Global Crypto Adoption Index 2022, juxtaposing traditional finance with digital currencies, gritty urban setting, dim streetlights contrast with vibrant crypto colors, anxious but hopeful mood, impressionist style.

The decision by Pakistan Finance Minister Aisha Ghaus not to legalize crypto trading in the country has sent ripples through the crypto-sphere. Her statement points to the influence of the Financial Action Task Force (FATF) and its recent removal of Pakistan from its “grey list” of countries under increased monitoring. The FATF is an intergovernmental organization focusing on combating money laundering and terrorist financing. It maintains a “black list” and a “grey list” since 2000, with countries on the grey list facing financial services restrictions, while those on the black list may face economic sanctions by FATF members.

The primary concern appears to be that crypto trading could potentially lead to financial terrorism, which would jeopardize Pakistan’s newly improved standing with the FATF. Ghaus emphasized that the State Bank of Pakistan (SBP) and the IT Ministry have begun working on banning cryptocurrencies to appease the FATF, stating, “Now that we have come out of FATF, this is an area we should avoid.” As a result, Pakistan may be foregoing the potential benefits of embracing crypto technology for its economy.

On the other side of the coin, however, is the growing adoption of cryptocurrencies in Pakistan, fueled by factors such as soaring inflation and a high rate of unbanked citizens. With more than 100 million adults without a bank account, the country ranked third in the Global Crypto Adoption Index for 2021, according to blockchain data platform Chainalysis, but slipped to sixth place in 2022. Furthermore, a 2021 report from the policy advisory board of the Federation of Pakistan Chambers of Commerce and Industry revealed that Pakistanis had invested approximately $20 billion in cryptocurrencies.

While there are legitimate

Source: Cryptonews

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