Pakistan’s Securities and Exchange Commission has published a paper discussing cryptocurrency regulations in the country. Meanwhile, the central bank has reportedly confirmed that there is no cryptocurrency ban.
Pakistani crypto regulation in the works
The Securities and Exchange Commission of Pakistan (SECP) has published a position paper on the regulation of cryptocurrency trading platforms.
In addition to discussing definitions and concepts of cryptocurrencies, the document outlines various regulatory approaches adopted worldwide, including the recommendations by the Financial Action Task Force (FATF), and regulations in Malaysia, Hong Kong, and the U.S. It also describes how cryptocurrency can be recognized in Pakistan, and regulatory proposals. “This consultation paper focuses exclusively on non-governmental or non-central bank cryptocurrencies issued and not on central bank digital currencies. [CBDCs], ”The Paper Notes.
The paper discusses two available approaches to regulating cryptocurrencies. First, cryptocurrency can be regulated and restricted under existing regulations “and in some cases may even imply an outright ban,” the SECP wrote.
Second, cryptocurrency can be regulated ‘based on the presumption of the’ let-things-happen ‘approach described by the Commodity Futures Trading Commission (CFTC) as the’ do-not-harm ‘approach … where the financial sector is seen as dynamic and the associated need to innovate is strongly emphasized. “
The SECP says its position paper “is primarily prepared on the basis of [the] second approach, “adding that it” plans to hold multiple discussion sessions and welcomes any input / comments. “The position paper can be found here.
No Crypto Ban
Meanwhile, the State Bank of Pakistan has reportedly clarified that cryptocurrency is not prohibited. The central bank attorney recently told the Sindh High Court that the bank has issued a warning about trading in cryptocurrencies, including bitcoin, but has not banned them.
Pakistan’s central bank has one circular of April 6, 2018, advising financial institutions, including banks and payment service providers, “to refrain from processing, using, trading, holding, transferring value, promoting and investing in virtual currencies / tokens.” It further states that financial institutions “will not facilitate their clients / account holders to transact in VCs / ICO tokens. Any transaction in this regard will be immediately reported to [the] Financial Monitoring Unit (FMU) as a suspicious transaction. “
This circular is similar to that of the central bank of India, the Reserve Bank of India (RBI), which has a banking ban about the crypto industry. The RBI circular was destroyed India’s Supreme Court in March and the banking ban was lifted in India.
Waqar Zaka, a TV presenter who has actively filed a petition to lift the ban imposed by Pakistan’s central bank, said the country’s crypto ban has been misreported by the media and that the Federal Investigation Agency (FIA) falsely arrested people for bitcoin possession. Zaka stressed that the arrests must stop and explained that “Parliament has not passed a law to ban bitcoin or other cryptocurrencies in Pakistan”.
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