Crypto Sector Could Suffer in Pakistan as Its Central Bank Looks to Ban Cryptocurrencies: Report
The State Bank of Pakistan has been in contact with the
Sindh High Court seeking ban on cryptocurrencies as well as fines for cryptocurrency
exchanges operating within the country.
The
market for cryptos grew up to $3 trillion (roughly about Rs. 2,15,66,720
crore) in the year before.
HIGHLIGHTS
- State Bank
of Pakistan is anti-cryptocurrencies
- The SBP
has proposed fining cryptocurrency exchanges
- The stance
on the crypto industry is not being taken from the Sindh High Court
Following
the time that El Salvador made Bitcoin a legal tender in September of last
year, the crypto-culture saw growth in various regions across the world. However,
the cryptocurrency industry is likely to face obstacles in
Pakistan. Central bank Pakistan is believed to be looking into a ban for
any cryptocurrency operating within the country. According to Chainalysis'
Global Crypto Adoption Index, Pakistan ranks third in the top 10 countries with
the most cryptocurrency users.
The
State Bank of Pakistan (SBP) has filed a petition in the Sindh High Court,
calling cryptocurrency like bitcoin "illegal" and unusable for
commercial purposes according to an study from Samaa.
The
SBP has also suggested that fines be assessed against cryptocurrency exchanges
that operate in Pakistan.
The
document submitted in court to SBP has referenced at least 11 countries, which
includes China along with Saudi Arabia, which have placed restrictions on
crypto-related space.
In
the meantime the court hasn't yet announced its final decision on the legal
status of cryptocurrency in Pakistan.
This
is not the only time the SBP has demanded the banning of cryptocurrency and related activities.
In
April of 2018 the highest finance institution in Pakistan has imposed a ban of
dealing with digital currencies. The ban did not deter crypto enthusiasts
from exploring the field however.
Recently,
the crypto trading platform Binance is being investigated for legal
disputes in Pakistan. It is believed that the Federal Investigation Agency
(FIA) of Pakistan will probe users complaints claiming that the exchange
compelled them to transfer funds to unknown third-party wallets. The fraud is estimated to have cost victims an
estimated $100 million (roughly around Rs. 740 crore).
While
others, such as India along with Russia and others, are also looking about
ways to regulate the crypto industry.
Since
transactions in cryptocurrency are not centralized and are untraceable in their
nature, governments all over the globe are concerned that they may help
facilitate illegal actions like terrorist financing and money
laundering. Its volatility on the cryptocurrency market is another thing
for authorities to consider before legalizing the market.
The
high electricity usage linked to cryptocurrency mining has become a source of
worry in many regions of the world which includes Iran as well as Kazakhstan.
Despite
the challenges the market for cryptocurrency grew by $3 trillion (roughly
around Rs. 2,15,66,720 crore) this year, the highest it's ever been.
Interested
in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty
and WeekendInvesting founder Alok Jain on Orbital , the Gadgets 360
podcast. Orbital is available on Apple Podcasts , Google Podcasts , Spotify , Amazon Music and wherever you get your
podcasts.
The
cryptocurrency is an unregulated digital currency, and is not an official
currency and subject to market risk. The information contained in the
article is not intended to constitute and is not intended to be the provision
of financial advice, trading advice as well as any kind of advice or suggestion
that is offered or supported by NDTV. NDTV will not be liable for any loss
that results from any investment made based upon any such forecast,
recommendation or suggestion or other information included within the report.
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