A committee, constituted under the supervision of deputy governor State Bank of Pakistan (SBP), recommended a complete ban on cryptocurrency and other related activities in Pakistan.
The committee was constituted by the Sindh High Court under the supervision of SBP’s deputy governor that will include officials of ministries of finance, information technology, Pakistan Telecommunication Authority and Securities and Exchange Commission of Pakistan to consider issues as to whether any form of cryptocurrency should be permitted under the Pakistani law.
SBP Deputy Governor Seema Kamil submitted a 38-page report recommending that cryptocurrencies be declared illegal.
The report stated that “after a careful risk benefit analysis, it emerged that the risks of cryptocurrencies far outweigh its benefits for Pakistan.”
The committee opined that only use of cryptocurrency in Pakistan seems to be speculative in nature where people are being enticed to invest in such coins for short term capital gains. Such enticement may result in the flight of precious foreign exchange as well as transfer of illicit funds from the country.
The committee also suggested a ban on unauthorised operations of exchanges. The committee stated that exchanges like Binance, OctaFx, etc, should be banned for their unauthorised operations and proportionate and dissuasive penalties be imposed on them by the federal government as some other countries have done.
Petitioner Waqar Zaka, however, opposed the recommendations.
The SHC’s division bench, headed by Justice Mohammad Karim Khan Agha, directed the committee to send a copy of the report to the ministries of finance and law, which shall consider the same at joint meetings and reach final decision whether or not cryptocurrency in any form is to be allowed in Pakistan and, if so, what would be the regulatory framework of such business.
The court directed both the ministries to place a joint recommendation as to whether business of cryptocurrency in any form can legally be carried out in Pakistan as this was also causing difficulty at this point in time for those engaged in such businesses keeping in view constant raids and freezing of bank accounts, which are allegedly being made by the users/dealers of this type of currency by the FIA.
The court directed secretaries of finance and law or other senior officers well conversant with cryptocurrency to appear in person and file the respective report on April 11.
The status of cryptocurrencies in Pakistan has been in limbo in the absence of laws and rules to regulate the use of these digital currencies for trade.
On October 20, the Sindh High Court told the federal government to regulate cryptocurrencies within three months.