In a recent session of the Senate Standing Committee on Finance and Revenue, Pakistan’s Minister of State for Finance and Revenue, Aisha Ghaus Pasha, announced that the country would ban cryptocurrency services and never legalize crypto trading. Pasha stated that the ban on cryptocurrencies was one of the requirements set by the Financial Action Task Force (FATF), which removed Pakistan from its gray list in October. The gray list consists of countries that the FATF considers deficient in Anti-Money Laundering and Counter-Terrorist Financing measures but are actively working to address these shortcomings.
Backing the decision, other officials, including State Bank of Pakistan (SBP) Director Sohail Jawad, expressed support for the ban. Pasha mentioned that the SBP and the Ministry of Information and Technology were in the process of drafting the legislation for the ban.
The announcement of the impending ban has sparked a wave of disapproval from the Pakistani crypto community. Some members expressed concerns over the government’s focus on banning crypto rather than addressing scams and fraudulent apps. They also highlighted the positive impact of crypto trading for individuals, particularly those with limited financial means.
It is important to note that FATF’s findings can influence government and corporate policies globally, even though the organization itself cannot impose sanctions on non-compliant countries. With Pakistan currently facing economic challenges and engaged in bailout negotiations with the International Monetary Fund, obtaining a positive report from the FATF may be a political priority.
While Pakistan has experienced relatively high crypto adoption, with Pakistani citizens reportedly holding $20 billion worth of crypto in 2021, the government has long been opposed to cryptocurrencies. The SBP has been reportedly seeking a crypto ban since at least January. Despite the ban, Pakistan has plans to launch its own central bank digital currency in 2025 and has recently adopted a national blockchain Know Your Customer platform.
If the legislation for the ban is enacted, Pakistan would join other countries such as China, Algeria, Bangladesh, Egypt, and Nepal in prohibiting cryptocurrencies. Concerns surrounding money laundering, criminal activities, price volatility, and decentralized currencies have driven these countries to take such measures.
The implementation of the ban on cryptocurrency services in Pakistan is expected to have significant implications for the local crypto community and the broader digital currency landscape in the country.
