• Pakistan’s government has announced that it will ban cryptocurrency services in the country and not legalize crypto trading.
• The decision was made to comply with requirements set by the Financial Action Task Force (FATF).
• The crypto community in Pakistan has criticized this move, stating that the government is destroying the country in the name of FATF and IMF.
Pakistan Government to Ban Cryptocurrency Services
In an apparent hardening of its stance against crypto, Pakistan’s government has stated that it would ban cryptocurrency services operational in the country and would never legalize crypto trading. This announcement was made by Aisha Ghaus Pasha, the Minister of State for Finance and Revenue, during a session of the Senate Standing Committee on Finance and Revenue on the 16th of May.
Requirements Set by FATF
Banning cryptocurrencies and crypto services operating in the country was one of the conditions set by the Financial Action Task Force. The task force had only recently removed Pakistan from its gray list which consists of countries that are viewed as lacking when it comes to Anti-Money Laundering and Counter-Terrorist Financing but are working to ensure compliance and remedy their issues. Several other officials extended their support to this decision, including State Bank of Pakistan Director Sohain Jawad who noted that they were working together with Technology Ministry to draft ban legislation.
State Bank’s First Clear Position on Crypto
In 2022, the State Bank of Pakistan announced that it planned to ban cryptocurrency trading, being its first clear position on this matter. Meanwhile, other banks have started reaching out to customers informing them about illegalities related to cryptocurrency trading.
Crypto Community Voices Disapproval
The Pakistani economy is facing an unprecedented crisis with government engaged in tense negotiations for a bailout package from International Monetary Fund (IMF). As a result, FATF compliance when it comes to crypto becomes something of a necessity leading to criticism from local crypto community who claim government is destroying country in name of FATF and IMF.
Ultimately while Financial Action Task Force cannot impose any sanctions directly their findings could still influence government policies globally making banning cryptocurrencies something required for Pakistan if they are looking for IMF approval or FATF removal from Gray List.