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- The government appears to be emulating China’s approach by completely banning cryptocurrency.
- Financial authorities in Pakistan regard cryptocurrencies as high-risk assets that offer no advantages.
On Wednesday, May 17, the Senate Standing Committee on Finance in Pakistan mandated the creation of new regulations concerning cryptocurrency. Inflation reached a record high of nearly 36% in April 2023, compounding the nation’s existing economic challenges.
Minister of State for Finance Ayesha Ghos Pasha stated yesterday that the legislation prohibiting the use of cryptocurrency would be implemented. During the meeting, the Senate Banking Committee received updates from the Ministry of Information Technology and the State Bank, both of which have initiated efforts to impose a ban on cryptocurrencies in Pakistan.
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Dr. Ayesha Ghos Pasha remarked that cryptocurrency will never gain legitimacy in Pakistan. Sohail Jabbar, the head of Digital State Bank, defended the institution by noting that the cryptocurrency market capitalization has fallen from $2.8 trillion to $1.2 trillion.
In his remarks to the Committee, he also described virtual currencies as a “total fraud” and asserted that they will never be legalized in Pakistan. The government appears to be following China’s example by entirely prohibiting cryptocurrency.
Financial officials in Pakistan view cryptocurrencies as high-risk investments that provide no benefits. Additionally, Pakistan is currently reluctant to antagonize any international organizations due to its fragile financial condition. The FATF has already imposed restrictions in this area, as highlighted by Dr. Ayesha Ghos Pasha.
Over the past decade, cryptocurrencies have served as a dependable hedge against inflation. There is significant uncertainty regarding the timing of Pakistan’s decision to ban digital assets, considering the current economic climate.
