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Author Topic: [2018-04-09] Pakistan’s Central Bank Prohibits Crypto Dealings with a Circular  (Read 18 times)
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April 09, 2018, 06:26:49 AM

The State Bank of Pakistan (SBP) has issued a circular on the “prohibition of dealing in virtual currencies”. The measure comes right after a similar move by the central bank of neighboring India. Commercial banks and payment providers have been told to stay away from crypto operations. They should not facilitate transactions of virtual currencies and tokens, the document states.    

Bitcoin, Pakcoin, Onecoin… Deemed Illegal

Pakistan’s central bank says virtual currencies like Bitcoin, Litecoin, Pakcoin, Onecoin, Dascoin, Pay Diamond, and tokens from initial coin offerings are not legal tender in the country. These are not guaranteed by the Government of Pakistan, the financial institution notes. SBP has not authorized any individual or entity to issue, sell, purchase, or exchange any such virtual currencies and coins in Pakistan, according to circular No. 03 published on the bank’s website.

No dedicated legislation regarding cryptocurrencies has been adopted in the country yet. Authorities, however, have demonstrated negative attitude towards bitcoin on many occasions. The Federal Investigation Agency, which has conducted several operations against cryptocurrency traders, recently called on the government in Islamabad to declare digital currencies “persona non grata”.

In accordance with the promulgated stance, all banks, microfinance entities, payment system operators and service providers are “advised to refrain” from dealing in cryptocurrencies. That includes the “processing, using, trading, holding, transferring, and investing” in digital coins. SBP also says that banks and companies should not facilitate crypto transactions of their customers and account holders.

Pakistani banks have been asked to “immediately” report any such transaction to the Financial Monitoring Unit (FMU). All crypto transactions have been called “suspicious”. The circular letter is signed by the State Bank’s director Muhammad Akhtar Javed, who asks the banks to acknowledge receipt.

According to Pakistani media, SBP has also warned citizens against using cryptocurrencies to transfer money abroad. Any person doing that will be subject to prosecution. Domestic and international transfer services are regulated by the central bank in Pakistan. It notes that no entity is authorized to offer cryptocurrency remittance services. Pakistanis have been advised not to engage in activities like mining, trading, and promoting virtual currencies.

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