The State Bank of Pakistan (SBP) has banned cryptocurrencies throughout the country. Although, Pakistan is not known for high volume trading in cryptocurrencies, still a lot of Pakistani people jumped in the currency business after spectacular rise in 2017.
Cryptocurrencies including bitcoin, ripple, litecoin etc are currently not being used at merchant level. However, a lot of people are trading in it in order to get massive profits.
However, in a circular issued yesterday, the SBP said that all virtual currencies are not legal tenders. They are neither issue nor guaranteed by Pakistan Government. Also, bank and financial institutions were advised to refrain from processing or paying of such virtual currencies.
“The SBP has not authorised or licensed any individual or entity for the issuance, sale, purchase, exchange or investment in any such virtual currencies/coins/tokens in Pakistan,” it said in the statement.
“All banks, development financial institutions, microfinance banks and payment system operators, payment service providers are advised to refrain from processing, using, trading, holding, transferring value, promoting and investing in virtual currencies/tokens.
“Further, they 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,” added the SBP in the statement.
In its Friday circular — titled “Caution regarding risks of virtual currencies”, the State Bank of Pakistan (SBP) rationalised: “Virtual Currencies/Coins/Tokens provide high degree of anonymity and potentially can be used for facilitating illegal activities.
“Also due to the ambiguous nature of Virtual Currencies, no legal protection or recourse is available to any individual,” the notification added.
Bitcoin reached record high of $20000 in December last year. Since then, it has been going down and is currently trading at $6500. The cyber vulnerabilities, volatile nature and speculations have concerned all governments around the world. While many countries are trying to regulate them and not actually banning, Pakistan and India have chosen the other path by banning the cryptocurrencies.