After an extended history of rejecting the technology, Pakistan is now moving to legalize cryptocurrency and the blockchain. In 2023, Pakistan was considered one of the numerous countries with a hardline policy on crypto use and blockchain technology.
Aisha Ghaus Pasha, the country’s Minister of State for Finance and Revenue, even publicly stated that “they are going to never legalize” crypto within the country.
Today, this policy is about to vary with the Pakistani government approving a proposed amendment to its State Bank of Pakistan (SBP) Act, allowing the state’s chief bank to issue its first digital currency.
Pakistan’s Major Policy Shift On Crypto
The Express Tribune reports that government sources have signaled a policy shift by the present administration. Plans to change the SBP Act, one objective of which is to permit the state bank so as to add a digital currency, at the moment are in place.
The SBP has been consistent in its policy to reject the adoption of a digital currency and has consistently published warnings on its use and promotion. Under the present proposal, the federal government and traditional financial institutions can add a digital currency.
The concept is to advertise a central bank that may manage the country’s funds physically and digitally.
Pakistan And Its History Of Crypto Prohibition
Pakistan’s state bank has traditionally led the opposition against cryptocurrency use, arguing against its volatility and difficulty in regulation.
In 2018, Pakistan’s SBP issued an order banning banks and other financial institutions from providing services to crypto exchanges or handling crypto-related transactions. The 2018 order specified that popular cryptocurrencies like Ether and Bitcoin aren’t legal tender in Pakistan.
In the identical order, the country’s chief finance policymakers explained that since cryptos offer a high degree of anonymity, bad actors may use these for illicit activities. For this reason SBP order, cryptocurrency activities in Pakistan were limited, stopping crypto exchanges from conducting business.
Banning Crypto To Avoid ‘Grey List’
The federal government’s initial reluctance to approve cryptocurrencies for transactions is connected to the conditions imposed by the Financial Motion Task Force (FATF).
Based on the duty force, Pakistan is not going to be included in its “grey list” if it doesn’t legalize cryptocurrencies like Bitcoin. With this order, the state banks have issued orders to local banks and financial institutions to tell their customers. As well as, remittances from foreign exchanges are also not allowed since they’re illegal and dangerous.
If the proposal passes, the federal government will file amendments to Section 24, which focuses on issuing, regulating, and managing digital currencies. Under the SBP Act, only the SBP of Pakistan can issue a digital currency and make it a legal tender.
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