The Crypto Sector May Suffer In Pakistan As Its Central Bank

After El Salvador made bitcoin legal tender in September last year, the crypto culture saw expansion in many parts of the world. However, the crypto sector may face hurdles in Pakistan. Pakistan’s central bank is reportedly considering banning the operation of all cryptocurrencies in the country. According to Chainalysis’ Global Crypto Adoption Index, Pakistan ranks third among the top 10 countries with the most crypto users.

According to a report by Sama, the State Bank of Pakistan (SBP) has submitted a document to the Sindh High Court describing cryptocurrencies like bitcoin as “illegal” and unusable for business purposes.

SBP has also reportedly suggested that fines should be imposed against crypto exchanges operating in Pakistan.

Submissions submitted to the court by SBP cited at least 11 countries, including China and Saudi Arabia, that have banned the crypto space.

As of now, the court has not announced its final stance on the legal status of cryptocurrencies in Pakistan.

This is not the first time the SBP has called for a ban on cryptocurrencies and other related activities.

In April 2018, Pakistan’s top financial institution banned transactions in digital currencies. That didn’t stop crypto enthusiasts from experimenting with the area.

Recently, crypto exchange Binance has been involved in legal issues in Pakistan. Pakistan’s Federal Investigation Agency (FIA) will investigate complaints from users alleging that crypto exchanges transferred money to them in unrecognized third-party wallets. It is estimated that a total of about $100 million (about Rs 740 crore) has been spent by the people in this scam.

Meanwhile, countries like India and Russia are also looking at ways to regulate the cryptocurrency space.

Since cryptocurrency transactions are decentralized and untraceable in nature, governments around the world fear that they could be used to facilitate illegal activities such as money laundering and terror financing. The volatility of the crypto market is another issue for the authorities to consider before legalizing the sector.

The excessive power consumption associated with crypto mining has also become a concern in many parts of the world, including Iran and Kazakhstan.

Despite the odds, the cryptocurrency market rose to $3 trillion (about Rs 2,15,66,720 crore) last year, the highest ever.

Interested in cryptocurrency? We discuss all things Orbital with WazirX CEO Nischal Shetty and WeekendInvesting Founder Alok Jain on the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

Cryptocurrency is an unregulated digital currency, is not legal tender and is subject to market risks. The information in this article is not intended to be financial advice, trading advice or any other advice or a recommendation of any kind offered or endorsed by NDTV. NDTV shall not be liable for any loss arising out of any investment based on any alleged recommendation, forecast or any other information contained in the article.

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