Cryptos have been popular all over the world, with millions of people possessing and reading with cryptocurrencies on a daily basis. The global digital currency, Bitcoin is already extremely popular and is expected to grow in value and popularity even more with the time being. Now, when all of the currencies experience terrible inflation, cryptos simply stay untouched, safely on the shore.
It is a well-known fact that countries and people always avoid adapting to any radical changes and it is hard to get used to a completely new tendency, which was unprecedented before. While some countries might be very tolerant and in favor of adopting the currency of the future, others are more conservative and prefer not to risk, rather keep up with the traditional approaches.
Pakistan is itself quite a conservative country, which has not undergone any major changes for very long. The people, as well as the government, do not make any sudden moves and thus, always prefer to continue the way they used to be. Yet, the globalization process will not leave anyone out and shall touch every single country and nation sooner or later.
Crypto Environment In Pakistan
As it became publicly known, people are fought and even sent to prison for trading with Bitcoins. Though, any specific law, banning crypto transactions within the country simply does not exist. Not many people and media talk about this issue, but the journalist, Waqar Zaka, who is also a television presenter is observed to actively petition to lift the ban imposed by Pakistan Central Bank. He says that the crypto ban has been misreported by the media as well as the Federal Investigation Agency, FIA and the government has been falsely arresting people for possessing bitcoins. In one of his interviews, he also mentioned and outlined the fact that the local parliament has not even passed any law to ban.
This has also been a recent topic of discussion in the Securities and Exchange Commission of Pakistan, SECP has published a paper stating that the cryptocurrency regulation in the country has changed, yet according to the approval from the Central Bank, there is no ban on the cryptocurrency in the country.
While crypto is legal according to regulatory authorities, people are still punished and arrested for possessing and trading with them. According to some sources, the main reason behind Pakistanis buying BTC is not due to hidden purchases online, but for trading. It is not only people who use cryptos as a primary payment method but also many financial companies as well. Yet, obviously, this can not be done openly. The most frequent case happens with brokerage companies, which operate in Pakistan and who accept BTC. Those companies do not shout out loud that they have cryptos as a pair, yet most of the people who have BTC, address local brokers in order to earn more.
However, these requests usually fall on deaf ears as officially peddling cryptocurrencies is simply not permitted with the majority of FX trading companies. What these traders would usually find is just a CFD offering which didn’t necessarily float their boat. For example, if we take a look at this Roboforex review, which seems to be an inconspicuous FX company licensed by CySEC. It does leave a feeling that they offer crypto trading opportunities to their customers, but it is just a disguised CFD offering. This is one of the main reasons why many Pakistani traders fall for these promotions, just to find their trades closed within a week of opening them due to deadlines.
How do Crypto Regulations work
The SEC has already published its opinion regarding the cryptocurrency trading platforms. The paper defines certain aspects of the industry. First of all, it takes about the concept of the cryptos and also outlines different regulatory approaches the country has adopted, based on the global examples and recommendations by the Financial Action Task Force (FATF) and some other first world country authorities. The paper also says that the crypto should be recognized in Pakistan, while also stressing the importance of the document for non-governmental and non-central bank issued crypto assets.
According to the published paper, there are two available approaches for regulating cryptocurrencies. The first approach is all about regulating the market view to implementing restrictions. In some cases, the restrictions might even include banning. The second approach though is “based on the conjecture of ‘let-things-happen’ approach, described by the Commodity Futures Trading Commission (CFTC) as the ‘do-not-harm’ approach. In this case, the financial sector is recognized as dynamic and innovative, which needs a new strong strategy.
After publishing the paper, SECP has made a comment, stating that they are mainly led by the second approach and that the finalization might require some more sessions of the discussion. Though the authority also said that they are open to the new inputs as well as comments.
This is not a BAN
Once the paper is officially verified, the State Bank of Pakistan clarified that the cryptocurrency is not banned. The central bank lawyer recently told the Sindh High Court issued the warning document regarding dealing in cryptocurrencies, this included bitcoin, but the document did not ban any of them. The Central Bank also issued another document, where they would encourage financial institutions, including banks and other payment services to bypass any kind of processing, transferring, holding or investing in cryptos. There is no document stating anything regarding the penalties, if they exist, in case of breaching the advice, though it is also mentioned that similar transactions will immediately be reported to the Financial Monitoring Unit (FMU), as a suspicious transaction.
The document is very similar to the one issued by India’s Central Bank, the Reserve Bank of India, which then imposed a banking ban on the Indian crypto industry. But, let’s have fingers crossed, and perhaps there is another scenario for Pakistan.