Pakistan’s Crypto Dilemma: Government Ban vs Soaring Adoption Rates

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Despite a growing interest in cryptocurrencies from retailers in Pakistan, the country’s government has hardened its stance on digital assets. The Minister of State for Finance and Revenue, Aisha Ghaus Pasha, recently announced that cryptocurrencies would “never be legalized in Pakistan.” The statement comes amid concerns that the Financial Action Task Force (FATF) has set a condition against the legalization of cryptocurrencies to prevent Pakistan from being placed on its “Grey List.”

As a consequence, Pakistan’s central bank, the State Bank of Pakistan (SBP), and the Information Technology Ministry, are said to be working on banning cryptocurrencies, which comes as no surprise since the SBP already declared its intention to ban digital assets earlier this year. Furthermore, several banks in Pakistan have begun informing their customers that cryptocurrency trading is illegal, citing “regulatory instructions from the State Bank of Pakistan (SBP).” As a result, debit and credit card usage for crypto trading is on the brink of prohibition.

However, it’s worth noting that cryptocurrencies have been gaining popularity within the nation. Local newspaper Dawn reported that Pakistan’s annual crypto trading volume has surged to $25 billion, a considerable increase from the $18 to $20 billion reported last year. Political turmoil and financial instability in the country have led many Pakistani retailers to convert their salaries into stablecoins as a hedge against the depreciating Pakistani rupee.

Ali Farid Khwaja, chairman of KTrade Securities, and CEO of BlockTech Pakistan, highlighted the public’s concern over a potential sovereign default, driving many citizens to buy USDT as a way to gain exposure to the US dollar. He added that even Bitcoin has performed well against the Pakistani Rupee, with over 20 million Pakistani citizens reportedly having opened accounts on various crypto platforms.

Bilal Bin Saqib, a blockchain investor, also acknowledged the staggering 57.4% decline of the Pakistani rupee’s value against the US dollar

Source: Coindesk

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