According to a government official, Pakistan has banned crypto services. Also, it will never legalize trading with cryptocurrencies. The ban is partly in response to concerns about terrorist financing and money laundering. Pakistan is currently facing an economic crisis with high inflation and growing debt burden.
Extensive ban is coming for cryptocurrencies!
Pakistan is introducing a wide-ranging ban on crypto services in line with a previous announcement. Aisha Ghaus Pasha, Minister of State for Finance and Revenue, went so far as to declare that cryptocurrency will never be legal in the country.
Pakistan has decided to impose a wide-ranging ban on crypto services. Accordingly, he fulfilled a threat made months ago. According to a report on local news outlet ProPakistani on Wednesday, Pasha said at a session of the Senate Permanent Finance and Revenue Committee on May 16 that Pakistan will ban online crypto services within the country and will not change course. This decision received support from other officials, including Sohail Jawad, Director of the State Bank of Pakistan (SBP). Pasha said the government will indefinitely deny legal status for cryptocurrencies in Pakistan.
Pakistan will “never” legalize crypto
cryptocoin.com As you follow, the proposal of the central bank and the federal government was first brought to the agenda on January 12, 2022. It is the first time that the State Bank of Pakistan has taken a public stance on the crypto asset class. The Sindh High Court had previously urged the government to regulate digital currencies in October 2020.
The chairman of the committee, Salim Mandviwala, states that Pakistanis are investing billions of dollars in cryptocurrencies. Last December, the Federation of Pakistan Chambers of Commerce and Industry said that Pakistanis invested $20 billion in 2021.
Aisha Ghaus Pasha stated that the Financial Action Task Force (FATF) mandated a crypto ban as one of the conditions for removing Pakistan from the graylist in October. The gray list consists of countries that the organization considers to have shortcomings on the Money Laundering and Counter-Terrorism Financing fronts. Countries have tried various measures to avoid the stigma of being blacklisted or greylisted, such as applying strict Know Your Customer procedures. But FATF is quite difficult to satisfy.
The ban will likely mean that crypto exchanges cease their official activities in the country. However, it is possible for citizens to access crypto services through unofficial channels such as VPNs.
Pakistan is in a deep economic crisis
Pakistan is currently in the midst of an economic crisis. As of April, the inflation rate is 36.4%. This rate is not very high in the world. However, it is the highest figure the country has seen since the mid-1970s. Pakistan’s debt has doubled approximately every five years over the past 25 years. Thus, it reached Rupees 62.5 trillion by the end of Imran Khan government in 2022. GDP grew at a much slower rate.
It is very difficult to sustain this debt burden. Because it caused debt service obligations to exceed federal government revenues in the 2022-23 fiscal year. The economic crisis played a role in the political disagreement between Prime Minister Shahbaz Sharif and former Prime Minister Imran Khan. This led to nationwide unrest, with Khan’s dismissal and the call for snap elections. Despite attempts to obtain loans from the IMF, the Han government failed to combat inflation and improve the economic situation.
