The State Bank of Pakistan (SBP) is trying to ban all cryptocurrency transactions in Pakistan.
The Sindh Supreme Court of Pakistan allegedly held a hearing related to the legal status of cryptocurrencies in the country, in which several Pakistani authorities, including the SBP, filed a document with the court, arguing that cryptocurrencies such as Bitcoin (BTC) are illegal and cannot be used for trading.
According to local news channel Samaa TV, the document quoted at least 11 countries, including China and Saudi Arabia, that chose for banning cryptocurrencies. The Pakistani central bank allegedly urged the court not only to ban cryptocurrency activity, but also to impose penalties against cryptocurrency exchanges.
The SBP also referred to several investigations against cryptocurrency exchanges by the Federal Investigation Agency (FIA), citing investor protection risks as well as money laundering and terrorism concerns. As previously reported, the FIA launched a criminal investigation against Binance, the world’s largest cryptocurrency exchange, in early January, alleging a possible link to a multi-million cryptocurrency scheme in the region.
Despite the SBP recommending a blanket ban on cryptocurrencies, the Sindh High Court has yet to order a ban on cryptocurrency transactions in Pakistan.
Instead, the court ordered the bank’s appeal to be sent to the ministries of finance and law, which will make a final determination on the legal status of cryptocurrencies in the country and verify whether a ban on cryptocurrencies would be constitutional.
The news comes years after the SBP issued an initial ban on trading digital coins and tokens in April 2018. At the time, the central bank argued that cryptocurrencies such as Bitcoin or initial coin offerings were not legal tender and were not “issued or guaranteed by the government of Pakistan.”
SBP did not immediately respond to Cointelegraph’s request for comment. This article will be updated awaiting new information.
The Pakistani government’s latest measures echo similar events in many countries, including India and Russia, where central banks are scrambling to ban cryptocurrencies, while other parts of the government are not necessarily leaning towards such a ban. In 2020, India’s central bank had to lift its ban on bank transactions with cryptocurrency-related companies, according to an order from the country’s Supreme Court.
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