Pakistan has recently announced its decision to ban cryptocurrency services and trading in the country, citing the need to prevent illegal digital currency transactions and comply with the Financial Action Task Force (FATF) conditions.The ban was partly in response to concerns over terrorism financing and money laundering, as Pakistan currently faces an economic crisis with high inflation and a growing debt burden.
The ban was announced by Minister of State for Finance and Revenue Aisha Ghaus Pasha, who said that cryptocurrencies will never be legalized in Pakistan. She said that the State Bank of Pakistan (SBP) and the Ministry of IT & Telecom have started work to block cryptocurrency services and websites dealing with the instrument in Pakistan. The Senate Committee on Finance also directed authorities to prohibit the use of cryptocurrencies in Pakistan.
The ban has sparked mixed reactions from the crypto community and the general public. Some have welcomed the move as a necessary step to protect the country’s financial system and national security, while others have criticized it as a backward and oppressive measure that stifles innovation and freedom.
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According to some experts, the ban will have a negative impact on the country’s economy and society, as it will deprive people of an alternative and decentralized form of money that can hedge against inflation and currency devaluation. Pakistan’s rupee has slid 3.3% to an all-time low against the dollar of 300 per greenback last week, amid political turmoil and corruption allegations against former Prime Minister Imran Khan.
Moreover, the ban will also affect the growing number of crypto enthusiasts and investors in Pakistan, who have been using digital currencies as a way to access global markets and opportunities. According to Zeeshan Ahmed, country general manager at Rain Financial, a Gulf-based trading platform for cryptocurrencies, the annual trading volume for Pakistan-based wallets has gone up to $25 billion, up from $18 billion to $20 billion a year ago.
The ban will also hamper the development of the crypto industry and ecosystem in Pakistan, which has seen some promising initiatives and projects in recent years. For example, PakCoin, a local cryptocurrency launched in 2015, claims to have over 100,000 users and merchants across the country. Another example is Urdubit, Pakistan’s first bitcoin exchange, which was founded in 2014 and shut down in 2018 due to regulatory uncertainty.
The crypto ban in Pakistan is not a new phenomenon, as the country has been issuing warnings and restrictions on digital currencies since 2015. However, the latest announcement seems to be more definitive and sweeping than before, leaving little room for hope or compromise. The crypto community in Pakistan is now facing a dilemma: whether to comply with the ban and risk losing their assets and opportunities, or to defy it and risk facing legal consequences and penalties.