In a move to curb illicit digital currency transactions, the Pakistani government has announced its decision to suspend online cryptocurrency services in the country. This decision aligns with the guidelines of the international organization tasked with monitoring counter-terrorist financing.
Compliance with FATF Restrictions
The State Bank of Pakistan (SBP) and the Ministry of Information Technology have initiated the process of banning cryptocurrencies, following the orders of the federal government. Dr. Ayesha Ghos Pasha, the State Minister of State for Finance and Revenue, confirmed during a Senate Standing Committee on Finance meeting that cryptocurrency will not be legalized in Pakistan, as per the restrictions imposed by the Financial Action Task Force (FATF).
High-Risk Nature of Crypto Transactions
Sohail Jawad, the head of SBP, supported Pasha’s statement, emphasizing the high-risk nature of cryptocurrency transactions and affirming that permission for cryptocurrency will never be granted in Pakistan. He highlighted the fact that there are over 16,000 types of cryptocurrencies, and while the market was previously valued at $2.8 trillion, it has now dropped to $1.2 trillion.
Concerns and Actions against Illegal Transactions
During the meeting, Senator Saleem Mandviwalla raised concerns about substantial investments in the cryptocurrency market. In response, the SBP official assured that the Federal Investigation Agency (FIA) and the Financial Monitoring Unit (FMU) are actively addressing these concerns. The FMU plays a crucial role in assisting in combating financing and money laundering.
Increasing Popularity of Cryptocurrency in Pakistan
It has witnessed a significant increase in cryptocurrency trading and mining, with growing interest reflected in the popularity of related social media content and online exchange transactions. However, due to the risks associated with cryptocurrencies and the need to comply with international standards, the government has decided to suspend online cryptocurrency services.
Collaborative Efforts to Combat Illegal Transactions
The ban on online cryptocurrency services in Pakistan is part of the country’s efforts to combat illicit financial activities and adhere to global standards. The decision reflects the collaborative efforts of the government, the SBP, the Ministry of Information Technology, the FIA, and the FMU in addressing the risks posed by cryptocurrencies.
Impact on the Crypto Market and Investor Sentiment
The suspension of online cryptocurrency services in Pakistan may have an impact on the overall crypto market. With Pakistan being a significant player in the global cryptocurrency landscape, the decision to ban online services could potentially affect investor sentiment and trading volumes. However, the priority for the Pakistani government is to prevent unlawful digital currency transactions and ensure compliance with international regulations.
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Conclusion
The Pakistani government’s decision to suspend online cryptocurrency services underscores its commitment to preventing illegal financial activities and complying with global standards. By aligning with the FATF guidelines, Pakistan aims to mitigate the risks associated with cryptocurrencies and strengthen its efforts in combating financing and money laundering. The impact of this decision on the cryptocurrency market and investor sentiment remains to be seen, but the government’s priority is to ensure the integrity of the financial system and protect the interests of its citizens.
