While the decision is yet to be made, the State Bank of Pakistan (SBP) is considering a ban on all digital currencies in the country
A hearing held by Pakistan’s Sindh High Court relating to the legality of cryptocurrency in the nation was attended by several Pakistani authorities, according to Samaa.tv.
The document submitted by the authorities argued that digital currencies such as Bitcoin are illegal and cannot be used for legal trade activities. The document cited 11 nations that have banned digital currencies including Saudi Arabia and China.
The Pakistani central bank not only wants cryptocurrency banned but also wants penalties to be set against crypto exchanges.
The ban comes with the increased risks of crypto investors given the varying investor protection risks in the trade, terrorism and money laundering concerns. A criminal investigation initiated by the Federal Investigation Agency (FIA) against Binance was linked to a multi-dollar virtual currency scam in the Pakistani region.
Despite the recommendation of the ban on digital currencies by SBP, the Sindh High Court is yet to order a ban on digital currencies in the region.
The Sindh High Court has ordered the appeal to be sent to the finance and law ministries for a final decision.
In April 2018, SBP released a prohibition on trading in virtual currencies. The central bank classified digital currencies or initial coin offerings as non-legal tenders, meaning that they were not guaranteed or issued by the Pakistani authorities.
The move to ban digital currencies in Pakistan comes as other nations including Russia and India try to block virtual currencies. India’s central bank was forced to lift its ban on digital currencies in 2020 as ordered by the country’s Supreme Court.
We’ve reported that more than half of crypto owners would like to get paid in cryptocurrency.