Pakistan suspends cryptocurrency services to combat illegal transactions

The Pakistani government announced on Wednesday that it will suspend cryptocurrency services provided over the internet in the country in order to prevent illicit digital currency transactions.

According to Geo, the State Bank of Pakistan (SBP) and the Ministry of Information Technology have already begun the process of prohibiting cryptocurrencies, complying with the directives.

During a briefing to the Senate Standing Committee on Finance, Dr Aisha Ghaus Pasha, the Minister of State for Finance and Revenue, emphasised that cryptocurrency will never be legalised in Pakistan.

She revealed that the Financial Action Task Force (FATF) has imposed restrictions on the matter, stating that the condition set by FATF is that cryptocurrency will not be legalised.

Supporting Pasha’s stance, Sohail Jawad, the Director of SBP, stated that crypto transactions carry high risks and will therefore never be granted permission in Pakistan. He explained that cryptocurrency is a virtual currency with over 16,000 types currently in existence. Additionally, he mentioned that the market, which was valued at $2.8 trillion, has now shrunk to $1.2 trillion.

Senator Saleem Mandviwalla from the Pakistan Peoples’ Party (PPP) expressed concerns over the billions of dollars invested in the market. In response, the SBP official reassured him by mentioning that the Federal Investigation Agency (FIA) and the Financial Monitoring Unit (FMU), a financial intelligence unit aiding Pakistan in combating terrorism financing and money laundering, are actively addressing these concerns.

Pakistan has witnessed a surge in cryptocurrency trading and mining, as evidenced by the growing interest in related social media videos and online exchange transactions.

Although the government had previously banned trading and mining of virtual currencies in April 2018, cryptocurrency mining continues to thrive in the country, despite the closure of several mining farms.

Most exchanges operate discreetly through undisclosed partners, evading regulatory oversight. Nevertheless, the government persists in its efforts to curtail crypto trading activities.