The State Bank of Pakistan (SBP), the country’s central bank, has reportedly come to a decision to ban the use of all cryptocurrencies within the country. The central bank has also asked the Sindh High Court to ban “unauthorized operations” of crypto exchanges and impose penalties on them.
A high-level interministerial committee constituted to make recommendations on whether any form of cryptocurrency should be permitted under Pakistani law reportedly submitted its report to the Sindh High Court Wednesday.
The committee was constituted by the Sindh High Court under the supervision of the deputy governor of the State Bank of Pakistan (SBP) and officials from the Pakistani Ministry of Finance, Ministry of Information Technology, Telecommunication Authority, and the Securities and Exchange Commission.
The 38-page report, submitted to the court by SBP Deputy Governor Sima Kamil, recommends a complete ban on all cryptocurrencies and related activities in Pakistan.
The committee stated that cryptocurrency should be declared illegal, emphasizing that after careful analysis, it found that the risks of cryptocurrency far outweigh its benefits for Pakistan. The report also warns that cryptocurrency could be used for money laundering and terrorism financing.
Furthermore, the committee urged the court to ban “unauthorized operations” of crypto exchanges and impose penalties on them as some countries have done. The report cites recent investigations by Pakistan’s Federal Investigation Agency (FIA) of crypto exchanges, including Binance, and the risks they pose to investors.
The Sindh High Court directed the committee to send a copy of the report to the Ministry of Finance and the Ministry of Law to make the final decision on whether any form of cryptocurrency will be allowed in Pakistan. The court also directed the two ministries to jointly recommend whether the crypto business of any form can be legally carried out in the country. They are to submit a report of their decision on April 11.
Petitioner Waqar Zaka, a television host and crypto entrepreneur, has argued that cryptocurrency should be declared legal. The court will resume hearing his petition on April 12.