Islamabad, Dec 2: After years of stringent opposition, Pakistan is moving to legalize cryptocurrency and blockchain technology by amending its State Bank of Pakistan (SBP) Act. This decision represents a significant policy reversal, as the government plans to authorize the SBP to issue its first digital currency.
History of Crypto Prohibition in Pakistan
In 2018, Pakistan’s SBP:
- Banned banks from facilitating crypto transactions.
- Declared popular cryptocurrencies like Bitcoin and Ether as illegal tender due to concerns over volatility, regulation challenges, and misuse for illicit activities.
The Financial Action Task Force (FATF) warned the government that legalizing cryptocurrencies could lead to placement on its “grey list,” influencing its reluctance to embrace cryptocurrency.
Policy Shift: The Path to Digital Currency
Additionally, the proposed amendments to Section 24 of the SBP Act aim to:
- Grant the SBP authority to issue, regulate, and manage digital currencies.
- Enable both government and financial institutions to adopt digital finance solutions, bridging physical and digital financial systems.
Implications of Legalizing Crypto
This move is expected to:
- Modernize Pakistan’s financial landscape.
- Address challenges posed by blockchain and cryptocurrency adoption.
- Align Pakistan with global trends in digital finance innovation.
If approved, this shift will mark a historic turning point for Pakistan’s financial policies, embracing blockchain and cryptocurrency as tools for economic growth.
