Pakistan’s Minister of State for Parliamentary Affairs, Ali Muhammad Khan, said that the government has no objection to the use of cryptocurrencies by Pakistani youth.
The lower house of parliament in Pakistan highlighted the absence of a regulatory framework for cryptocurrency on 20 October 2021. This promoted the Minister of State for Parliamentary Affairs to affirm the government’s position.
On the same day, the Sindh High Court urged the government in Islamabad to institute a regulatory framework. The court has also formed a committee chaired by the finance secretary to study cryptocurrency. It says it expects a report from the committee in the next three months.
Until recently, the lax approach toward crypto regulation caused the Pakistani government to attract the attention of the global money-laundering watchdog, the Financial Action Task Force. This is due to the potential for money laundering and terrorism financing to go unchecked.
In 2018, the central bank of Pakistan imposed a ban on cryptocurrencies. It stated that bitcoin, pakcoin, onecoin, and tokens from initial coin offerings were not legal tender. As a result, the ban was comprehensive. It did not allow any entity or individual to buy, issue, sell, or exchange digital currency.
Pakistani courts have proved instrumental
The courts of Pakistan have been instrumental in nudging the adoption of cryptocurrencies forward. Following the 2018 ban, a petition was circulated and brought to the attention of the court.
It responded by urging the Securities and Exchange Commission of Pakistan (SECP), the central bank (SBP), the Ministry of Law and Justice, and the Ministry of Information Technology and Communication to consult with each other regarding a potential crypto regulatory framework.
Another crypto-related case, heard by the Lahore High Court, enlisted the help of the SECP, SBP, the Federal Investigation Agency, and the federal government, asking them to present relevant legal positions.
Social media’s role in promoting cryptocurrencies
In spite of confusing regulatory moves, social media has been responsible for the growing interest in cryptocurrency in Pakistan. Information on how to buy, trade, and mine cryptocurrency is available via social media groups.
At the same time, Youtube videos on bitcoin by Waqar Zaka, a former TV host has over one million subscribers.
Zaka has crypto mining interests and has been a critical proponent of cryptocurrency legalization in Pakistan. He has been enlisted by a provincial government in Pakistan to help them understand how they can profit from such ventures.
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