On a move to combat illegal digital currency transactions and comply with guidelines set by the global anti-terror financing watchdog, the Pakistani government announced its decision to suspend online cryptocurrency services within the country. The State Bank of Pakistan (SBP) and the Ministry of Information Technology have initiated the process of banning cryptocurrencies in adherence to the federal government's directives.
During a session of the Senate Standing Committee on Finance, Minister of State for Finance and Revenue, Dr Aisha Ghaus Pasha, emphasized that cryptocurrency would not be legalized in Pakistan, citing the restrictions imposed by the Financial Action Task Force (FATF). She reiterated that the FATF had specifically mandated that cryptocurrency should not be legalized.
Backing Pasha's stance, SBP Director Sohail Jawad stated that crypto transactions carried high risks, making it unsuitable for approval in Pakistan. He explained that there are currently over 16,000 types of cryptocurrencies, but the market, once valued at $2.8 trillion, has now shrunk to $1.2 trillion.
Senator Saleem Mandviwalla from the Pakistan Peoples' Party (PPP) raised concerns about the substantial investments made in the cryptocurrency market. In response, the SBP official assured that the Federal Investigation Agency (FIA) and the Financial Monitoring Unit (FMU), responsible for combating terrorism financing and money laundering, are actively working on addressing these concerns.
Despite the ban on trading and mining virtual currencies imposed by the government in April 2018, cryptocurrency mining has continued to thrive in Pakistan. While some mining farms have been shut down, many operate discreetly through undisclosed partnerships, evading regulatory oversight. The government, however, has been persistent in its efforts to curb crypto trading.
With the suspension of online cryptocurrency services, Pakistan aims to enhance its anti-money laundering measures and strengthen its compliance with international guidelines.
