Pakistan Legalizes Crypto: A Major Shift From Ban To Boom

Source Bitcoinist

After a long history of rejecting the technology, Pakistan is now moving to legalize cryptocurrency and the blockchain. In 2023, Pakistan was one of the many countries with a hardline policy on crypto use and blockchain technology.

Aisha Ghaus Pasha, the country’s Minister of State for Finance and Revenue, even publicly stated that “they will never legalize” crypto in the country.

Today, this policy is about to change with the Pakistani government approving a proposed amendment to its State Bank of Pakistan (SBP) Act, allowing the state’s chief bank to issue its first digital currency.

Pakistan’s Major Policy Shift On Crypto

The Express Tribune reports that government sources have signaled a policy shift by the current administration. Plans to modify the SBP Act, one objective of which is to allow the state bank to add a digital currency, are now in place.

The SBP has been consistent in its policy to reject the adoption of a digital currency and has consistently published warnings on its use and promotion. Under the current proposal, the government and traditional financial institutions can add a digital currency.

The idea is to promote a central bank that can manage the country’s finances physically and digitally.

Pakistan And Its History Of Crypto Prohibition

Pakistan’s state bank has traditionally led the opposition against cryptocurrency use, arguing against its volatility and difficulty in regulation.

In 2018, Pakistan’s SBP issued an order banning banks and other financial institutions from providing services to crypto exchanges or handling crypto-related transactions. The 2018 order specified that popular cryptocurrencies like Ether and Bitcoin are not legal tender in Pakistan.

In the same order, the country’s chief finance policymakers explained that since cryptos offer a high degree of anonymity, bad actors may use these for illicit activities. Because of this SBP order, cryptocurrency activities in Pakistan were limited, preventing crypto exchanges from conducting business.

Banning Crypto To Avoid ‘Grey List’

The government’s initial reluctance to approve cryptocurrencies for transactions is connected to the conditions imposed by the Financial Action Task Force (FATF).

According to the task force, Pakistan will not be included in its “grey list” if it does not legalize cryptocurrencies like Bitcoin. With this order, the state banks have issued orders to local banks and financial institutions to inform their customers. In addition, remittances from foreign exchanges are also not allowed since they’re illegal and risky.

If the proposal passes, the government will file amendments to Section 24, which focuses on issuing, regulating, and managing digital currencies. Under the SBP Act, only the SBP of Pakistan can issue a digital currency and make it a legal tender.

Featured image from DALL-E, chart from TradingView

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Gold sits near record high as Fed rate cut bets keep USD depressedGold (XAU/USD) retreats slightly after touching a fresh record high, around the $3,689-3,690 region during the Asian session on Tuesday, amid some repositioning trade ahead of key central bank events.
Author  FXStreet
Sep 16, Tue
Gold (XAU/USD) retreats slightly after touching a fresh record high, around the $3,689-3,690 region during the Asian session on Tuesday, amid some repositioning trade ahead of key central bank events.
placeholder
Bitcoin could rally alongside S&P 500 if Fed cut ratesBitcoin (BTC) could be poised for a price surge following its positive correlation with the S&P 500, as market participants anticipate a 25-basis-point rate cut from the Federal Reserve on Wednesday.
Author  FXStreet
21 hours ago
Bitcoin (BTC) could be poised for a price surge following its positive correlation with the S&P 500, as market participants anticipate a 25-basis-point rate cut from the Federal Reserve on Wednesday.
placeholder
AUD/JPY Price Forecast: Constructive outlook remains in play above 97.50The AUD/JPY cross extends the decline to near 97.80 during the Asian trading hours on Wednesday.
Author  FXStreet
19 hours ago
The AUD/JPY cross extends the decline to near 97.80 during the Asian trading hours on Wednesday.
placeholder
Gold pulls back from record highs as USD recovers ahead of Fed decisionGold (XAU/USD) attracts some sellers during the Asian session on Wednesday and moves away from the all-time peak, levels just above the $3,700 mark touched the previous day.
Author  FXStreet
19 hours ago
Gold (XAU/USD) attracts some sellers during the Asian session on Wednesday and moves away from the all-time peak, levels just above the $3,700 mark touched the previous day.
placeholder
Federal Reserve set to resume interest-rate cuts as concerns over labor market mountThe US Federal Reserve is expected to cut the policy rate for the first time in 2025.
Author  FXStreet
15 hours ago
The US Federal Reserve is expected to cut the policy rate for the first time in 2025.
goTop
quote