A meeting of the Standing Committee on Finance was held under the chairmanship of Senator Saleem Mandviwala at Parliament House today. During the meeting, it was revealed that the State Bank of Pakistan (SBP) and the Ministry of IT & Telecom have initiated efforts to ban the use of cryptocurrencies in the country. The committee directed authorities to take necessary actions to block cryptocurrency services and websites dealing with this instrument within Pakistan.
The Stance Against Legalizing Cryptocurrencies
Minister of State for Finance and Revenue Dr. Aisha Ghaus Pasha, while addressing the committee, emphasized that cryptocurrencies will never be legalized in Pakistan. She explained that the Financial Action Task Force (FATF) has imposed strict conditions on the usability and viability of cryptocurrencies, rendering them unsuitable for adoption as a medium of exchange in the country. Dr. Pasha highlighted the significance of adhering to FATF guidelines and reiterated that Pakistan would not allow the use of cryptocurrencies within its borders.
Shrinking Global Crypto Market Cap
The Senate Committee was briefed on the global cryptocurrency market’s contraction from $2.8 trillion to $1.2 trillion. This significant decline indicates a substantial decrease in the overall value of cryptocurrencies. As a result, concerns have arisen regarding the stability and reliability of these digital assets as investment instruments.
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Billions Invested in Cryptocurrencies
Committee chairman Salim Mandviwala expressed his concern about the substantial investment made by Pakistanis in cryptocurrencies. According to his claims, billions of dollars have been invested in this contentious financial instrument, raising worries about potential financial losses and risks associated with unregulated digital assets.
Monitoring and Investigation of Pakistani Investments
The committee was informed that the Federal Investigation Agency (FIA) and the Federal Board of Revenue’s Financial Monitoring Unit (FMU) are actively monitoring Pakistani investments in cryptocurrencies. Regular monitoring is crucial to identify any illicit activities or potential threats posed by these investments. Additionally, an ongoing investigation is currently underway to ensure the legality and compliance of such investments.
The Extent of Cryptocurrency Varieties
Sohail Javaad, the Director of the Payment Systems Department at the central bank, shed light on the vast number of cryptocurrencies in existence. He revealed that over 16,000 different types of cryptocurrencies have been created so far, showcasing the proliferation of digital assets in the global financial landscape.
Cryptocurrencies as High-Risk Investments
Other SBP officials addressed the Senate panel and expressed their views on cryptocurrencies as high-risk investments. They characterized the exchange medium as a “total fraud” and emphasized that it would never be legalized in Pakistan. These officials cautioned against the potential dangers and pitfalls associated with cryptocurrencies, urging the committee to take swift action to prohibit their use in the country.
Prohibition of Cryptocurrencies in Pakistan
After extensive deliberations on the matter, the standing committee directed authorities to implement a ban on cryptocurrencies in Pakistan. This decision marks a significant move by the local authorities to crack down on illicit sources of financing and regulate the use of digital assets within the country.
Regulatory Interventions and Uncertain Future
The world of cryptocurrencies has witnessed several regulatory interventions in Pakistan over the past few years. Local authorities have intensified their efforts to combat illicit financing and address the risks associated with digital assets. Despite initial hopes of a regulatory shift towards adopting cryptocurrencies as legal tender, the current situation remains incredibly uncertain. It is unclear whether the country will ultimately see the regularization of digital assets
