Dr. Aisha Ghaus Pasha, Pakistan’s Finance Minister, says cryptocurrency would never be authorized. In a Senate Standing Committee on Finance meeting, she warned that cryptocurrencies could violate Financial Action Task Force (FATF) rules.
According to local media, Pakistan’s Minister of State for Finance and Revenue, Dr. Aisha Ghaus Pasha, has stated that cryptocurrencies will “never be legalized” in the South Asian nation. Reports indicate that the Minister, during a meeting of the Senate Standing Committee on Finance, asserted that not banning cryptocurrencies would violate the conditions set by the Financial Action Task Force (FATF) for the nation’s withdrawal.
In October, the FATF, a global organization that fights money laundering and the financing of terrorism, took Pakistan off its “grey list.” The group has compiled a list of nations it believes do not meet its AML and CTF standards.
During the discussion, Sohail Jawad, the Director of the State Bank of Pakistan (SBP), emphasized Pasha’s stance on cryptocurrencies. Jawad stated that crypto transactions carry substantial risks and will be prohibited. Pasha further mentioned that the SBP, along with the Ministry of Information and Technology, has been working towards banning the use of cryptocurrencies in the country.
Pakistan wants to ban cryptocurrency
The most recent development comes after news broke in January 2022 that Pakistan’s government and top financial institution were attempting to outlaw digital assets. According to local media, the government of Pakistan presented a paper to the high court arguing against virtual currencies.
A local newspaper in the nation, Dawn, reported earlier in April that banks there frequently send out notifications to consumers cautioning them against using their debit or credit card for cryptocurrency trading. In 2018, the SBP issued a circular. The circular explicitly warned banks and payment companies against handling or trading virtual currencies and tokens.
“Virtual Currencies (VCs) like Bitcoin, Litecoin, Pakcoin, OneCoin, DasCoin, Pay Diamond, etc. or Initial Coin Offerings (ICO) tokens are not legal tender, issued, or guaranteed by the Government of Pakistan,” the central bank declared. It states that “SBP has not authorized or licensed any individual or entity for the issuance, sale, purchase, exchange, or investment in any such Virtual Currencies/Coins/Tokens in Pakistan.”
A Leader in Crypto Adoption Globally
Despite the government’s strong opposition to cryptocurrencies in Pakistan, the general population still holds a favorable view of the currency. Pakistan is the sixth-largest crypto adopter globally, after Vietnam, the Philippines, the Ukraine, India, and the United States, according to Chainalysis’ 2022 statistics.
According to Reuters, Pakistan’s inflation rate hit a record high of 36.4% in April as the nation’s citizens continue to struggle with the devaluation of their currency in the middle of an unstable political climate. These patterns help to explain why Pakistanis are using dollar-backed stablecoins as an inflation hedge.
The SBP adopted new laws. These laws aim to establish a central bank digital currency by 2025. The government opposes cryptocurrencies. However, the SBP is pushing ahead with its plans. In addition, Pakistani banks agreed to collaborate. Their goal is to create a platform for customer identification. This platform will be based on blockchain technology.