Crypto Sector Could Suffer In Pakistan As Its Central Bank Wants To Ban Cryptocurrencies: Report

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After El Salvador made Bitcoin legal tender last September, cryptoculture saw an expansion in several parts of the world. However, the crypto sector in Pakistan could likely face obstacles. The Pakistani central bank is reportedly considering banning all cryptocurrencies in the country. According to Chainalysis’ Global Crypto Adoption Index, Pakistan ranks third in the top 10 countries with the highest number of crypto users.

The State Bank of Pakistan (SBP) has submitted a document to the Sindh High Court in which cryptocurrencies such as Bitcoin are described as “illegal” and unusable for trading purposes, according to a report by Samaa.

The SBP has also reportedly proposed imposing fines on crypto exchanges operating in Pakistan.

The submission submitted to the court by the SBP named at least 11 countries, including China and Saudi Arabia, that have imposed restrictions on the crypto space.

The court has not yet announced its final position on the legal status of cryptocurrencies in Pakistan.

This is not the first time the SBP has called for a ban on cryptocurrencies and other related activities.

In April 2018, the Pakistani financial institution Apex initiated a ban on trading in digital currencies. However, this didn’t stop crypto enthusiasts from experimenting with the sector.

Recently, the Binance crypto exchange in Pakistan became embroiled in legal issues. The Pakistani Federal Investigation Agency (FIA) will investigate complaints from users that the crypto exchange has induced them to transfer funds to unknown third-party wallets. The scam is estimated to have cost people around $ 100 million (approximately 740 billion rupees) in total.

Meanwhile, nations such as India and Russia are pondering ways to regulate the crypto space.

With cryptocurrency transactions being decentralized and undetectable, governments around the world fear that they could be used to facilitate illegal activities such as money laundering and terrorist financing. The volatility of the crypto market is another issue that authorities need to watch out for before legalizing the sector.

The excessive power consumption associated with crypto mining has also been a concern in many parts of the world, including Iran and Kazakhstan.

Despite the obstacles, the cryptocurrency market soared to $ 3 trillion last year, the highest level it has ever seen.

Interested in cryptocurrency? We discuss everything about crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music, and anywhere you get your podcasts.

Cryptocurrency is an unregulated digital currency, not legal tender and is subject to market risks. The information provided in this article is not intended as financial advice, trading advice, or any other advice or recommendation of any kind offered or endorsed by NDTV. NDTV is not responsible for losses that may arise from an investment based on perceived recommendations, forecasts or other information contained in the article.

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