Reports said that the State Bank of Pakistan (SBP) is reportedly seeking to ban all cryptocurrency transactions in Pakistan.
It has been reported that Pakistan’s Sindh High Court reportedly held a hearing related to the legal status of cryptocurrencies in the country, in which several Pakistani authorities, including the SBP, submitted a document to the court, arguing that cryptocurrencies like Bitcoin (BTC) are illegal and cannot be used for trade.
However, the document cited at least 11 countries, including China and Saudi Arabia, that have opted to ban cryptocurrencies. The Pakistani central bank reportedly urged the court not only to ban cryptocurrency activity but also to impose penalties against crypto exchanges.
The report said that the SBP also referred to several investigations against crypto exchanges by the Federal Investigation Agency (FIA), citing investor protection risks as well as money laundering and terrorism concerns.
As previously reported, the FIA started a criminal investigation against Binance, the world’s largest crypto exchange, in early January, alleging a possible linkage to a multi-million-dollar crypto scam in the region. Despite the SBP recommending a blanket ban on crypto, the Sindh High Court has not ordered a ban on crypto transactions in Pakistan just yet.
Likewise, the court has ordered that the bank’s appeal be sent to the finance and law ministries, which will make a final determination on the legal status of cryptocurrencies in the country and ascertain whether a crypto ban would be constitutional. The news comes years after the SBP issued an initial prohibition on dealing in digital currencies and tokens back in April 2018.
At the time, the central bank argued that cryptocurrencies such as Bitcoin or initial coin offerings were not legal tender and were not “issued or guaranteed by the government of Pakistan.” The latest moves by the Pakistani government echo similar events developing in many countries, including India and Russia, where the central banks are trying hard to ban crypto, while other parts of the government are not necessarily inclined to such a ban.
Thus, in 2020, India’s central bank had to lift its ban on banks’ dealings with crypto-related firms in accordance with an order by the country’s Supreme Court.