The SHC has ordered the Government to regulate cryptocurrency within three months and has requested a detailed report about the matter.
Learn more: The order was issued during a hearing regarding a petition challenging the ban on cryptocurrencies. Pakistan’s State Bank issued a circular in 2018 banning virtual currencies and making it clear that they are not legal tender.
The High Court has now ordered the Security and Exchange Commission and the Central Bank of Pakistan to work together on crypto regulations with IT and law ministries.
Why it matters: Crypto has become increasingly popular in the country with Facebook groups and YouTube videos explaining how to mine and trade cryptocurrency. Bitcoin, the gold standard of Cryptocurrency, is currently at an all-time high. Regulating cryptocurrency would be a wise move.
Despite not being approved by regulators, Pakistanis are downloading crypto-related apps like Binance and Kraken.
Between the lines: The government has concerns that cryptocurrency might add to the problem of “money laundering and terrorism financing” especially with the pressure coming in from the Financial Action Task Force (FATF).
The big picture: “Digital Pakistan” could benefit from the introduction of cryptocurrency regulation. Sindh is the second province to request clarification on cryptocurrencies. At the end of last year, the KPK assembly asked the Federal Government to simply legalize crypto.
There was also a crypto-related case heard at the Lahore High Court. People lost a lot of money to a fake digital currency that circulated on social media. The LHC requested that the federal authorities explain the laws governing the use of cryptocurrency in Pakistan.
Digital currencies are also being studied by the State Bank of Pakistan. As Reza Baqir explained, they are looking to bring “off-the-book transactions into a regulatory framework.”
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