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Thursday September 28, 2023

Pakistan govt decides to suspend online cryptocurrency services

Dr Aisha Ghaus Pasha says cryptocurrency will “never be legalised in Pakistan” as FATF has also imposed restrictions

By Business Desk
May 17, 2023
In this file photo taken on January 27, 2020 a physical imitation of a Bitcoin is seen in Dortmund, western Germany, on January 27, 2020. — AFP
In this file photo taken on January 27, 2020 a physical imitation of a Bitcoin is seen in Dortmund, western Germany, on January 27, 2020. — AFP

In order to prevent illegal digital currency transactions as per the guidelines of the global anti-terror financing watchdog, the Pakistani government revealed on Wednesday that it has decided to suspend cryptocurrency services available online in the country.

The State Bank of Pakistan (SBP) and the Ministry of Information Technology, following the orders of the federal government, have initiated work on banning cryptocurrencies, Minister of State for Finance and Revenue Dr Aisha Ghaus Pasha told the Senate Standing Committee on Finance.

She said the cryptocurrency will “never be legalised in Pakistan” as the Financial Action Task Force (FATF) has also imposed restrictions.

“FATF had set a condition that cryptocurrency will not be legalised,” she maintained.

SBP Director Sohail Jawad, while endorsing Pasha’s views, said that crypto transactions involve “high risk”; therefore, it will never be granted permission in Pakistan.

“Cyrtocurrency is virtual currency and more than 16,000 types have been formed so far,” he said, adding that the $2.8 trillion market has now shrunk to $1.2 trillion.

During the meeting, Pakistan Peoples’ Party (PPP) Senator Saleem Mandviwalla raised concerns over the billions of dollars invested in the market. 

Addressing the concerns, the SBP official said that the Federal Investigation Agency (FIA) and Financial Monitoring Unit (FMU) — a financial intelligence unit which helps Pakistan to fight against terrorism financing and money laundering — are working on this.

Pakistan has seen a boom in trading and mining cryptocurrency, with interest increasing in thousands of views of related social media videos and online exchange transactions.

Cryptocurrency mining flourished in Pakistan until April 2018 when the government banned trading and mining virtual currencies. There is still a growing mining industry despite the fact that many mining farms have been shut down since this ban was implemented.

Most exchanges operate through ghost partners and never show on the regulatory radar. However, the government has been making continuous efforts to stop crypto trading.