Pakistani found alternative ways to trade cryptocurrencies, despite the ban. We all aware with the fact that cryptocurrency is now banned in Pakistan however the decision of ban hasn’t proved to be as successful as expected. Pakistanis are still trading it as they got alternative ways to do that.
The State Bank of Pakistan (SBP) has banned commercial banks and financial firms from trading in cryptocurrency thinking that it would be hard for local exchanges but in some ways individual traders have found substitute to sell or acquire cryptocurrencies, disobeying all the prohibitions and warnings from national bank.
It seems that financial authorities are unable to find solid measures and to fill a legal vacuum with prohibitive administrative measures. In the month of April, the SBP issued a circular on the “prohibition of dealing in virtual currencies”.
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On the other hand, India gave banks and traders 3 months to meet the terms and obey the ban, but Pakistani central bankers forced the ban with effective immediately. According to State Bank of Pakistan, virtual currencies and tokens were not legal tender and told that it had not authorized any individual or entity to issue, sell, purchase, or exchange any such coins in country.
SBP also warned and “advised to refrain” to all microfinance entities, payment system operators and service providers in Pakistan from dealing in cryptocurrencies.
Right after the decision, the CEO of Pakistan’s first bitcoin exchange Urdubit, Danyal Manzar decided to close down permanently following the prohibition. He also said that approximately100 different digital coins were being traded on daily basis across all mediums before the ban implemented by SBP.
“The decision was made in haste. Ample time should always be provided for a proper shutdown. But we respect the SBP’s decision.” he told The Express Tribune.
According to Danyal Manzar, those who want to trade will carry on to do so.
“Alternative ways still exist that will continue to be tapped no matter how risky they are. Cryptocurrencies would only disrupt the stock market and not the entire monetary system. About 80 to 85% of the traders from stock exchanges came to try their luck in virtual currency.” He also added.
The central bank’s decision initially caused a dip in the crypto market but the volume of trading has gradually picked up after alternative trading methods were discovered.
Giving the remarks on the issue, a lahore-based trader Majid Ali said,
“Traders realized that the SBP hasn’t, and can’t ban cryptocurrency in Pakistan, What the State Bank has done is ban banks from entertaining crypto, so if you’re not dealing via banks, you [still] can own and trade virtual currency in Pakistan, which comes under the IT ministry.”
“The government of Pakistan can’t stop the trade in an international commodity that is accepted in other countries. The ban actually opens transfer channels that can be used for illegal purposes.” He added.
Interestingly, the price of Pakistan’s first and only cryptocurrency, Pakcoin, clearly mentioned in the SBP’s ban has also jumped over 60%.
The founder of Pakcoin, Abu Shaheer says that the ban has in fact worked in favor of Pakcoin by “serving to expose Pakcoin’s name [and] more people got interested in it.” It is important to mention here that Pakcoin token is already being used for mobile phone credit top-ups as well.
However, we are getting many rumors from Pakistan’s Ministry of Information Technology and Telecommunication (MoITT) that the government is planning to officially announce cryptocurrencies illegal in the country. “We have forwarded our recommendation for a ban on all forms of virtual currency trading, and proper legislation is being worked on.”
What are your remarks about the ban, do you think that bans imposed by State Bank of Pakistan can really stop cryptocurrency trade or in future it would be able to stop trading of such currencies? Let’s know in the comments section below.
