On Wednesday, May 17, Pakistan’s Senate Standing Committee on Finance issued directives for legislation aimed at curbing the use of cryptocurrencies in the country. This decision was made in the midst of major economic difficulties Pakistan faces, with inflation reaching over 36% during the last month of April 2023.
The legislation, supported by the Minister of State for Finance Ayesha Ghos Pasha, seeks to ban any use of cryptocurrencies within Pakistan’s borders. Both the Ministry of Information Technology and the State Bank have been instructed to work on implementing this ban. Dr. Ayesha Ghos Pasha declared that Pakistan would never legalize digital currencies. The Executive Director of Digital State Bank, Sohail Jabbar, pointed out that the global crypto market has diminished from $2.8 trillion to a mere $1.2 trillion, referring to cryptocurrencies as a “total fraud” and emphasizing that they would never be allowed in Pakistan. This stance mirrors China’s recent decision to impose an absolute ban on cryptocurrency use.
The financial policymakers of Pakistan regard cryptocurrencies as high-risk assets and are convinced that no one stands to benefit from them. Given the country’s current economic climate, Pakistan is unwilling to challenge global institutions at this moment. Dr. Ayesha Ghos Pasha cited the Financial Action Task Force (FATF)’s imposed conditions on allowing cryptocurrency transactions while speaking about the ban. According to Dr. Ayesha, quoted by the local publication Independent Urdu, “Crypto can also lead to financial terrorism, already we are not getting an IMF deal, they need some excuses against us.”
However, critics argue that cryptocurrencies have demonstrated their capacity to act as a hedge against inflation over the past decade. So, is banning these digital assets the most effective course of action for a nation experiencing a fragile economic state like Pakistan?
In conclusion, the Pakistani government’s decision to ban cryptocurrencies is not without controversy. Supporters of the ban argue that the risks associated with digital currencies are too great and cite FATF restrictions as a deterrent. Yet, opponents contend that cryptocurrencies can protect against inflation and provide a valuable financial instrument for individuals in countries struggling with economic instability. Time will tell whether Pakistan’s choice to follow China’s path will be beneficial or detrimental to the nation and its people.
Source: Coingape
