crypto news: Pakistan plans to ban crypto; industry players call it a big mistake

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New Delhi: The Pakistani government and its central bank are considering banning the use of cryptocurrencies in the neighboring state, local media suggest.

A committee led by Sima Kamil, the deputy governor of the State Bank of Pakistan (SBP), its central bank, has proposed to ban the use of cryptocurrencies in the country.

Other members included representatives from the Ministry of Finance, the Securities and Exchange Commission of Pakistan (SECP) and the Federal Investigation Agency of Pakistan (FIA).

This is the first time that a clear position has been taken by the central bank. In 2018, SBP issued a circular banning banks from dealing with cryptocurrency exchanges.

The committee submitted the report to the Sindh High Court, which was hearing a digital currencies case and ordered its formation. He raised concerns about the use of cryptocurrencies for money laundering and terrorist financing.

The crypto industry in Pakistan has come under intense scrutiny of late, with the FIA ​​intending to investigate the local Binance branch in an alleged scam, which has cost more. from $ 100 million to several thousand investors.

The case was exposed by local TV host and crypto entrepreneur Waqar Zaka, who wanted the court to rule that cryptocurrencies be declared legal because large numbers of Pakistanis are interested.

Zaka tweeted accusing anonymous people of receiving death threats and alleged that Imran Khan, the incumbent Prime Minister of Pakistan, is anti-crypto.

I’m getting weird calls from unknown numbers that I shouldn’t appear in Sindh court tomorrow, for Crypto curre… https://t.co/4JZunFS6BU

– Waqar Zaka (@ZakaWaqar) 1641905584000 In a separate video post, Zaka threatened to hit Democracy Chowk in Islamabad to protest the proposed cryptocurrency ban, if all legal doors are closed.

Many Pakistanis believe that crypto is the solution to their financial problems. The country faces high inflation, heavy debts and low foreign exchange reserves.

On the other hand, industry experts have rejected Pakistan’s plan to ban crypto because they believe that banning crypto is not a solution and that Pakistan is likely to commit serious harm. error.

Vikas Ahuja, CEO of CrossTower India, said cryptocurrency is more than just money. This is a new framework for finance and information and Pakistan has seen a significant increase in crypto investments during the pandemic.

“With its choice to control innovation, Pakistan could lose an important role in the most important industry of the future,” he added.

Industry experts have said that with the intention of banning crypto assets, Pakistan is forcing innovation and advancement instead of embracing this new technology.

Shivam Thakral, CEO of BuyUcoin, said: “We have seen in the past that isolated crypto bans have had no significant impact on the crypto industry.”

You have to understand the fact that crypto is a global phenomenon and that actions taken by a particular country might not be able to stop a revolution like crypto and blockchain, he added.

Industry experts also believe it will cause a brain drain from Pakistan as freelancers and developers leave the state to seek roles in the growing space.

Arjun Khazanchi, Co-Founder and CLO, Rooba Finance said Pakistan’s crypto ban should not be viewed in a one-dimensional way. Pakistan’s biggest allies and trading partners, including China and Saudi Arabia, have also banned crypto.

“Despite a thriving web3 space full of developers and investors, the sector would suffer and the country unfortunately will not be able to participate and reap the benefits of this growing space.” he added.

However, one should not take the plunge and come to a conclusion as soon as the central bank which has submitted its declaration to the High Court and is subject to appeal.

Pakistan has considered banning cryptocurrencies in the past and its government is reiterating it now. Passing a law banning cryptos is easier than enforcing it, said Sathvik Vishwanath, Co-Founder and CEO, Unocoin

“Pakistan is already considered on the gray list when it comes to receiving financial aid and such a ban would only make the country less lucrative for the rest of the world, even for partnerships or collaboration,” a- he added.

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