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Pakistan’s Securities and Exchange Commission has released a document discussing the regulation of cryptocurrencies in the country. Meanwhile, the central bank has reportedly confirmed that there is no cryptocurrency ban.
Pakistan’s encrypted settlement in progress
The Securities and Exchange Commission of Pakistan (SECP) has published a position paper on the regulation of cryptocurrency trading platforms.
In addition to discussing the definitions and concepts of cryptocurrencies, the paper outlines the different regulatory approaches taken globally, including recommendations from the Financial Action Task Force (FATF) and regulations in Malaysia, Hong Kong and the United States. It also describes how the cryptocurrency could be recognized in Pakistan and regulatory proposals. “This consultation paper focuses exclusively on cryptocurrencies issued by non-governmental or non-central banks and not on central bank digital currencies. [CBDCs]”, Look at the document.
The paper discusses two approaches available for regulating cryptocurrencies. First, cryptocurrency can be regulated and restricted under existing regulations “and in some cases it can even result in a total ban,” the SECP wrote.
Second, cryptocurrency can be regulated “on the conjecture of the ‘let things happen’ approach, described by the Commodity Futures Trading Commission (CFTC) as the ‘do not harm’ approach … where the financial sector it is considered dynamic and the associated need to innovate is strongly emphasized “.
The SECP states that its position paper “is mainly prepared on the basis of [the] second approach, “adding that” intends to hold multiple discussion sessions and welcomes any input / comments. “The position paper can be found here.
No encryption ban
Meanwhile, the State Bank of Pakistan reported that it made it clear that cryptocurrency is not banned. 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.
The central bank of Pakistan issued a circular dated 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 currencies / virtual tokens “. It further states that financial institutions “will not facilitate their customers / account holders to transact in VC / ICO tokens. Any such operation must be immediately reported to [the] Financial Monitoring Unit (FMU) as a suspicious transaction “.
This circular is similar to the one issued by India’s central bank, the Reserve Bank of India (RBI), which has imposed a banking ban on the cryptocurrency industry. The RBI circular was overturned by the Indian Supreme Court in March and the banking ban was lifted in India.
Waqar Zaka, a TV presenter who actively petitioned to lift the ban imposed by Pakistan’s central bank, said the country’s cryptocurrency ban was misreported in the media and the FIA falsely arrested people for possessing bitcoin. Stressing that the arrests must end, Zaka explained that “Parliament has not passed any law to ban” bitcoin or other cryptocurrencies in Pakistan.
What do you think of Pakistan regulating cryptocurrency? Let us know in the comments section below.
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