• Pakistan’s government has announced a ban on cryptocurrency services and trading in the country.
• The decision was made to comply with the requirements of the Financial Action Task Force (FATF).
• The move was met with disapproval from the Pakistani crypto community, who claimed that it would hurt the economy.
Pakistan Announces Ban on Cryptocurrency Services
In an apparent hardening of its stance against crypto, Pakistan’s government has stated that it would ban cryptocurrency services operational in the country and would never legalize crypto trading. Banning crypto was one of the requirements put forward by the Financial Action Task Force (FATF).
Reasons for Banning Crypto
The announcement was made by Aisha Ghaus Pasha, the Minister of State for Finance and Revenue, during a session of the Senate Standing Committee on Finance and Revenue on the 16th of May. The minister added that banning cryptocurrencies and crypto services operating in the country was one of the conditions set by the Financial Action Task Force. The task force had only recently removed Pakistan from its gray list. FATF’s gray list consists of countries that the body considers lacking when it comes to Anti-Money Laundering and Counter-Terrorist Financing. However, these countries are viewed as working to ensure compliance and remedy their issues. Several other officials, such as State Bank of Pakistan Director Sohain Jawad, extended their support to the decision. According to reports,the State Bank of Pakistan and Technology Ministry were working together to draft legislation banning cryptocurrencies in 2022.
Crypto Community Response
The Pakistani economy is facing an unprecedented crisis, with tensions high while negotiating a bailout package with International Monetary Fund (IMF). As a result, FATF compliance when it comes to crypto becomes something of a necessity. However, this didn’t stop criticism from members within Pakistani’s crypto community who voiced their disapproval at what they perceive as destroying their economy in name FATF and IMF compliance .
Banks Warn Customers About Illegal Trading
Meanwhile banks have started reaching out to customers informing them about illegal cryptocurrency trading stating: “As per regulatory instructions from SBP any remittance foreign exchange directly/indirectly outside Pakistan overseas foreign exchange trading margin trading CFD trading apps/websites/platforms through any payment channel is not allowed/permitted by SBP such payments are inherently risky & illegal.“
Pakistan’s government has decided to ban all cryptocurrency services operating within its borders in order comply with demands imposed by FATF but this move has been met with disapproval from local crypt communities who feel like this could further strain their already fragile economy