PTA opposes banning cryptocurrencies

SBP, SECP and IT ministry propose restrictions on crypto transactions

ISLAMABAD:

The Pakistan Telecommunications Authority (PTA) has expressed concerns over the decision to ban the trading of cryptocurrency in the country.

Earlier, the State Bank of Pakistan (SBP), Securities and Exchange Commission of Pakistan (SECP) and the Ministry of Information Technology and Telecommunication proposed a complete ban on crypto-based transactions.

According to the PTA, such a measure might affect several other associated technologies as well as progress of IT start-ups. Meanwhile, the law ministry, while demanding a valid justification for banning crypto-currencies, suggested that it could help in developing a legal framework for regulating or banning the trade of the digital coins in the country.

The government has decided to seek at least three months’ time from the Sindh High Court (SHC) to prepare and submit joint recommendations of the Ministry of Finance and the Ministry of Law on the subject of cryptocurrencies.

The decision was taken at the second meeting chaired by the finance secretary regarding the complications faced while preparing policy recommendations on cryptocurrency on the directions of the Sindh High Court.

According to the documents available with The Express Tribune, the meeting reviewed “whether cryptocurrencies should be allowed in the country in any form or not”.

During the meeting, additional finance secretary apprised the participants about the case background and informed them of a study conducted by a sub-group.

During the meeting, the central bank, SECP and the Ministry of Information Technology and Telecommunication proposed a ban on crypto business and maintained that its permission could lead to capital flight, money laundering and terrorism financing besides raising concerns for Financial Action Task Force (FATF).

“Cryptocurrency business should be banned in the country due to lack of legal framework,” they said.

Meanwhile, representatives from PTA maintained that banning cryptocurrencies in Pakistan would be an issue “as it is not possible to impose a complete ban on crypto transactions”.

“Though well-known websites and exchanges can be geo-blocked, users can bypass the digital barricades through the use of VPNs and proxy servers,” PTA said, adding that a great amount of cryptocurrency transactions were being facilitated through online social platforms which cannot be completely blocked.

Published in The Express Tribune, April 21^st, 2022.

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