The State Bank of Pakistan (SBP) has issued a circular prohibiting all dealings in virtual currencies. This move comes just after the central bank of India took a similar move. Payment providers and commercial banks have been told to avoid any dealings in cryptocurrencies. They are not allows to process any transactions of tokens or virtual currencies.
Bitcoin, Pakcoin, Onecoin… Deemed Illegal
According to the central bank of Pakistan, virtual currencies like tokens, Pay Diamond, Dascoin, Onecoin, Pakcoin, Litecoin and Bitcoin from initial coin offerings are not recognized as legal tender under the country’s financial laws. The financial institution noted that they are not recognized by the Government of Pakistan. According to circular No. 03, which was published on the institution’s websites, SBP noted that it has authorized any entity or individual to purchase, sell, issue or exchange coins or virtual currencies in the country.
In the country has not adopted any legislation regarding digital currencies. Authorities have however showed a negative attitude towards bitcoin on several occasions. Recently, the Federal Investigation Agency has been carrying out operations to crack down cryptocurrency, appealed to the government to declare digital currencies “persona non grata”.
According to the recently promulgated stance, all microfinance institutions, banks, providers of payment systems as well as service providers have been advised to avoid dealing in digital currencies. This includes using, holding, processing, transferring and investing in digital currencies. The central bank also added that companies and banks are not allowed to facilitate transactions involving crypto for their account holders and customers.
Banks in Pakistan are required to immediately report any such dealings in cryptocurrencies to the Financial Monitoring Unit (FMU). In circular, all transactions involving crypto have been termed as “suspicious”. Muhammad Akhtar Javed, a director of the State Bank signed the circular and asked banks to acknowledge receipt.
According to media reports in the country, citizens have also been warned against using digital currencies to send money abroad. Any person found doing that risks being prosecuted. The central bank of Pakistan regulates all local and international money transfer services in the country. It has since warned banks and companies from offering digital currencies remittance services.
