Pakistan has firmly rejected the notion of legalizing cryptocurrency trading, citing concerns about potential risks, particularly in relation to terrorist financing.
The rejection comes shortly after the country’s removal from the Financial Action Task Force’s (FATF) grey list, with officials highlighting the susceptibility of virtual currencies to exploitation for illicit financial activities.
In 2018, the State Bank of Pakistan (SBP) had already stated that cryptocurrencies like Bitcoin, Litecoin, and Pakcoin were not recognized as legal tender and were not issued or guaranteed by the government.
During a session of the Senate Standing Committee on Finance and Revenue, Dr. Aisha Ghaus Pasha, the state minister for finance, made a policy statement emphasizing that granting permission for crypto trading was impractical given the recent exit from the FATF grey list. Senator Farooq Naek echoed this sentiment, stating that crypto trading was speculative and should be prohibited, as digital currencies could potentially be used for financial terrorism.
The SBP officials present at the committee meeting concurred, noting that cryptocurrencies lacked effective regulation and were already banned in countries such as the United States, Canada, and China.
Despite Pakistan experiencing a surge in cryptocurrency adoption over the past few years, ranking third in the Global Crypto Adoption Index for 2020-21, the country slipped to sixth place in 2022. A research report by the policy advisory board of the Federation of Pakistan Chambers of Commerce and Industry revealed that Pakistanis had invested approximately $20 billion in cryptocurrencies in 2021. The report also highlighted cryptocurrency and property as the best-performing asset classes in the country that year.
Virtual and digital currencies rely on blockchain technology, which utilizes a decentralized ledger to record transactions across peer-to-peer networks.
‘Cryptocurrency in Pakistan’ will never be legalized
