The Pakistan Central Bank And The Federal Government Propose A Total Crypto Ban.

The State Bank of Pakistan and the federal government have both suggested that cryptocurrencies be completely banned. The Sindh High Court has directed the organizations to develop regulations. The law and finance ministries will now analyze their report.

According to reports, the government of Pakistan and its central bank, the State Bank of Pakistan, have agreed to prohibit cryptocurrencies. On January 12, local media outlets stated that the supposed complete ban plan would penalize bitcoin exchanges.

The prohibition is now only a recommendation, and it is uncertain if it will be strongly contested while authorities analyze it.

The Sindh High Court (SHC) has been investigating the legality of digital currencies, and this is the first time the central bank has taken a position on the crypto asset class. The SHC has requested that the asset class be regulated by the government in October 2020. With the restriction, it appears that none of that will be necessary, since crypto will have no place in the country.

The key grounds for the suggestion, as stated by other governments, are terrorism financing and money laundering. Many other nations, on the other hand, have set regulations, such as KYC processes, to prohibit similar activities – a considerably less draconian measure.

The measures make cryptocurrencies illegal and untradeable, while it is unclear what the implications would be for the investor. As it is, the advice is unclear, with the SHC requesting that the report be referred to the law and finance ministries for further consideration.

These ministries will assess if a prohibition is permissible under the Constitution. They will also create a legal framework, which should provide more clarity on the potential punishments. Popular crypto influencers have also spoken in, claiming that “youth want crypto” and that the prime minister should step in.

Pakistan has joined the ranks of roughly 10 other nations that have prohibited the use of cryptocurrency. The most notable of these is China, which outlawed the asset class last year while developing its own central bank digital currency (CBDC). Egypt and Bolivia are two more nations that have outlawed cryptocurrency.

Many nations permit bitcoin and cryptocurrencies in some form, however the majority operate in the shadows. The rapid expansion of the cryptocurrency sector has not been followed by consistent regulation. Countries have only began to look into regulation in the last 12 months or so.

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