Pakistan Announces New Crypto Ban, But Adoption as Coverage Remains Popular

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The Pakistani government has toughened its stance against cryptocurrencies, even as retailers continue to hedge their financial bets against a devalued Pakistani rupee in part due to an unstable political situation in the country.

Cryptocurrencies will never be legalized in Pakistan, Minister of State for Finance and Revenue Aisha Ghaus Pasha told the country’s Standing Senate Finance Committee on Wednesday, according to local reports.

The minister said the Financial Action Task Force (FATF) had set a condition that the cryptocurrency would not be legalized to keep it off the watchdog’s so-called ‘grey list’ of international finance, according to a local media, and another said that Pakistan said position is because it goes against the conditions set by the FATF.

Pasha also reportedly said that the country’s central bank, the State Bank of Pakistan (SBP) and the Ministry of Information Technology have been ordered to start work on banning cryptocurrencies. In January 2022, the SBP said it planned to ban crypto, its first clear stance on new financial technology, CoinDesk reported.

Meanwhile, banks in Pakistan have started informing customers that cryptocurrency trading is illegal, at least two sources told CoinDesk.

“As per the regulatory instructions of the State Bank of Pakistan (SBP), any transfer of currency directly/indirectly out of Pakistan to overseas currency trading apps/websites/platforms, from margin trading and trading CFDs through any payment channel is not permitted/authorized by SBP and such payments are inherently risky and illegal,” said a post from a bank in Pakistan seen by CoinDesk.

On April 30, 2023, Pakistani newspaper Dawn reported that banks have officially warned customers against using debit or credit cards for crypto trading. But Dawn also said cryptocurrencies are growing in popularity in the country, with annual trading volume for Pakistan-based wallets reaching $25 billion, up from $18 billion to $20 billion a year ago. according to Zeeshan Ahmed, Country Managing Director at Rain. Financial, a Gulf-based trading platform for cryptocurrencies.

Khan claims the police want to arrest him again. The arrest has already led to massive protests across the country.

The Pakistani rupee fell 3.3% to an all-time low against the dollar of 300 per greenback last week, Bloomberg reported.

The political and financial instability has seen Pakistani retailers convert their salaries to stablecoins as a hedge, multiple sources told CoinDesk.

Ali Farid Khwaja, Chairman of KTrade Securities and CEO of BlockTech Pakistan, told CoinDesk that people fear a sovereign default, especially since the Pakistani government has been unable to secure support from the International Monetary Fund. .

“I suspect that many people are buying USDT on crypto platforms to gain exposure to the US dollar,” he said. “Even Bitcoin has performed well against the Pakistani rupee. During the crypto run, more than 20 million Pakistanis are said to have opened accounts on crypto platforms.”

Blockchain investor Bilal Bin Saqib noted that the value of the Pakistani rupee has fallen 57.4% against the dollar over the past year.

“For the majority of the population, stablecoins have emerged as the most convenient method of accessing the US dollar, as acquiring physical dollars is hampered by the import restrictions currently in place,” he said. he declares.

CoinDesk has contacted FATF and is exchanging comments like Binance and Kucoin.

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