Consequences of Cryptocurrency ban in Pakistan

According to the latest crypto news resources reported that the State Bank of Pakistan has imposed a cryptocurrency ban in Pakistan. Cryptocurrency ban in Pakistan came out through a circular issued on its website which declared that virtual currencies like Bitcoin, Litecoin, Pakcoin or Initial Coin Offerings (ICO) tokens are not legal tender, issued or guaranteed by the Pakistan government.

In Pakistan the volume of trading remains on the lower side, Bitcoin’s sudden surge in value in 2017 has successfully attracted many people to open accounts with various exchanges and trade.

Although the merchant community in Pakistan is not much interested, many people at an individual level are tempted to trade given cryptocurrencies’ spectacular rally recently.

State Bank has not authorized any individual for the issuance, sale, purchase, exchange or investment in any kind of virtual currencies/coins/tokens in Pakistan.

The State Bank of Pakistan advised all payment system operators, development financial institutions, microfinance banks and payment service providers to refrain from processing, transferring value, promoting and investing in any kind of these virtual currencies/tokens. They will not be facilitating their customers/account holders to transact in these virtual currencies or tokens. If any transaction takes place, it should be immediately reported to the Financial Monitoring Unit (FMU) as a suspicious transaction as told by the State Bank.

What are the consequences?

Bitcoin has established itself as a significant unit of trade in Pakistan, this is a major blow to the cryptocurrency. Marketers are hoping that further growth could be achieved in a developing country whose economy is in struggle process such as Pakistan, but this now seems unlikely for the future. Waving the legality of Bitcoin saying that it is not registered in State Bank as a legitimate exchange medium in Pakistan is indicative of a tendency across such emerging economies to legislate against the digital payment system in the country. Cryptocurrency ban in Pakistan doesn’t look like a really good idea.

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