The Securities and Exchange Commission of Pakistan (SECP) has published a paper discussing cryptocurrency regulation in the country.
It has been reported that meanwhile, the central bank has confirmed that there is no cryptocurrency ban.
However, besides discussing definitions and concepts of cryptocurrencies, the paper outlines different regulatory approaches adopted globally, including the recommendations by the Financial Action Task Force (FATF), and regulations in Malaysia, Hong Kong, and the US.
Also, it details how cryptocurrency could be recognized in Pakistan and regulatory proposals.
The paper notes:
“This consultation paper focuses exclusively on non-government or non-central bank issued crypto assets and not on central bank digital currencies [CBDCs].”
Likewise, the paper discusses two approaches available for regulating cryptocurrencies.
The SECP wrote that firstly, cryptocurrency can be regulated and restricted according to existing regulations “and may in some instances even entail outright banning.” Secondly, cryptocurrency can be regulated “based on the conjecture of ‘let-things-happen’ approach, described by the Commodity Futures Trading Commission (CFTC) as the ‘do-not-harm’ approach … where the financial sector is considered as dynamic and the associated need to innovate is strongly emphasized.”
The SECP further said:
“Its position paper “is mainly prepared based on [the] second approach. it “intends to hold multiple discussion session and welcomes any input/comments.”
Moreover, the State Bank of Pakistan has clarified that cryptocurrency is not banned, as the central bank’s lawyer recently told the Sindh High Court that the bank issued a warning about dealing in cryptocurrencies, including Bitcoin, but did not ban them.
It has been analyzed that Pakistan’s central bank 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 virtual currencies/tokens.”
“Financial institutions will not facilitate their customers/account holders to transact in VCs/ICO tokens. Any transaction in this regard shall immediately be reported to [the] Financial Monitoring Unit (FMU) as a suspicious transaction.”
Waqar Zaka, a television presenter who has been actively petitioning to lift the ban imposed by Pakistan’s central bank, said that the country’s crypto ban has been misreported by the media and the Federal Investigation Agency (FIA) has falsely been arresting people for possessing Bitcoin.
Thus, Zaka explained that “Parliament has not passed any law to ban” bitcoin or other cryptocurrencies in Pakistan.
Source: Bitcoin News