Crypto Vs. Government: Pakistan's Epic Battle Unfolds

Pakistan's official approach towards cryptocurrencies is becoming increasingly strict, despite the continued enthusiasm from its citizens who seek a hedge against the depreciating national currency amid the country's volatile political climate.

During a meeting with the Senate Standing Committee on Finance, Aisha Ghaus Pasha, Pakistan's Minister of State for Finance and Revenue, reinforced the government's position against the digital currency phenomenon.

Pasha was quoted stating categorically that cryptocurrencies will "never be legalized in Pakistan."

According to Pasha, the stringent stance is driven by stipulations imposed by the Financial Action Task Force (FATF), an international finance watchdog.

By refraining from legalizing cryptocurrencies, Pakistan aims to avoid the FATF's infamous "Grey List."

Reports suggest the State Bank of Pakistan (SBP), the country's central bank, and the Information Technology Ministry have been instructed to commence actions geared towards prohibiting cryptocurrencies.

Early last year, the SBP disclosed its intentions to proscribe cryptocurrencies, marking its inaugural explicit position on the emergent fintech.

Simultaneously, Pakistani banks started to caution customers that crypto trading is prohibited.

Messages from Pakistani financial institutions inform customers that any outbound remittances to foreign crypto trading platforms, either directly or indirectly, are regarded as risky, illegal and in violation of SBP's regulations.

In April 2023, a news report from Dawn, a Pakistani newspaper, highlighted that customers have been officially warned against employing debit or credit cards for crypto trading.

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Despite this, the appeal of cryptocurrencies within the nation appears to be on the rise.

Dawn quoted Zeeshan Ahmed, the country's general manager at Rain Financial, a Gulf-based crypto trading platform, who reported the annual trading volume for Pakistani wallets increased to $25 billion from the previous $18 to $20 billion.

This crackdown on cryptocurrencies coincides with a period of political upheaval in Pakistan.

The recent arrest and subsequent release of former Prime Minister Imran Khan sparked extensive protests across the nation.

Amid this tumult, Pakistan's currency, the rupee, plunged to a record low against the dollar, underlining the country's fraught economic predicament.

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Photo: Syed Wasiq Shah from Pixabay