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Pakistan plans to ban cryptocurrencies

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The State Bank of Pakistan (SBP) and the federal government have decided to ban the use of all cryptocurrencies. Local news Samaa reported this, with reference to a report submitted to the Supreme Court of Sindh Province.

On October 20, 2021, the court instructed the authorities to form a committee within three months to create a regulatory framework for regulating cryptocurrencies. As well as to prepare a report on the use of digital assets. The High Court of Sindh (SHC), Pakistan’s highest judicial authority, urged the government to come up with Bitcoin regulatory mechanisms.

The SHC issued the directive while hearing a lawsuit challenging the constitutionality of Pakistan’s 2018 crypto prohibition, according to Pakistani English newspaper The Express Tribune.

Thus, the submitted document states that cryptocurrencies are illegal and cannot be used for trading. It lists at least eleven countries, including China and Saudi Arabia, that have banned virtual currencies.

The report also mentions the authorities’ investigation into crypto exchanges. Such as Binance and OctaFX, and the risk that these platforms pose to investors. Furthermore, the Federal Investigation Agency (FIA) of Pakistan has given a formal warning to Binance; in an effort to trace the origins of a multi-million dollar cryptocurrency scam in the country.

The court ordered to send the document to the finance and law ministries to make a final decision on the legal status of cryptocurrencies. These agencies will also determine whether the prohibition of digital assets does not contradict the Constitution.

Prohibition of any transactions with virtual currencies

The 38-page report was presented by the deputy governor of SBP Sima Kamil. In 2018, the central bank issued a circular prohibiting financial institutions from carrying out any operations with virtual currencies.

Recall, according to researchers from the Law Library of Congress, 51 countries in the world have introduced bans for cryptocurrencies to some extent. Egypt, Iraq, Qatar, Oman, Morocco, Algeria, Tunisia, Bangladesh, and China are among the nine new jurisdictions with an outright prohibition. In 2021, the most focus was on China’s cryptocurrency ban.

Aside from the 51 jurisdictions that have enacted crypto bans, 103 have enacted anti-money laundering and counter-terrorist financing (AML/CFT) legislation, up from 33 jurisdictions in 2018.

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