Pakistan’s Minister of Finance and Revenue Aisha Ghaus Pasha has said that Pakistan will ban cryptocurrency services from operating in the country and vowed never to legalize cryptocurrency trading.
Other officials including State Bank of Pakistan (SBP) Director Sohail Jawad voiced support for the decision to “ban” cryptocurrencies. Before this ban, the Pakistani crypto community launched a wave of strong protests.
Pasha said that banning cryptocurrencies was one of the requirements set forth by the Financial Action Task Force (FATF), which removed Pakistan from its “gray list” in October 2022. The gray list includes countries that the agency deems to have deficiencies in combating money laundering and countering the financing of terrorism.
The FATF cannot impose sanctions on countries that do not comply, but the FATF’s findings have the potential to influence government and business policies around the world. Pakistan’s economy is in deep crisis and the country is currently engaged in intense negotiations on a bailout package with the International Monetary Fund (IMF)
According to CoinTelegraph, in 2021, Pakistani citizens are said to be holding $20 billion worth of cryptocurrency. However, Pakistan plans to launch a central bank digital currency (CBDC) in 2025 and has recently adopted a national blockchain platform called “Know your customer”.
The ban attempt comes at a time of political turmoil in Pakistan. Previously, former Prime Minister Imran Khan was arrested on corruption charges. He was released after Pakistan’s Supreme Court ruled the arrest unlawful, which has led to massive protests in the country.
According to Bloomberg, the Pakistani rupee fell 3.3% to an all-time low.
According to CoinDesk, Pakistan’s political and financial instability has led investors to turn to stablecoins as a protective shield.
President of KTrade Securities and CEO of BlockTech Pakistan Ali Farid Khwaja said that Pakistanis are afraid of government default, especially as the government is still in negotiations with the IMF about the support package.
He believes that many people are buying USDT on crypto platforms as a way to gain access to USD, even Bitcoin performs better than the Pakistani rupee. According to the report, more than 20 million Pakistanis have opened accounts on cryptocurrency platforms, said BlockTech Pakistan CEO