The State Bank spokesperson said, “The stance on cryptocurrency remains unchanged, and we have advised all financial institutions to refrain from engaging in cryptocurrency transactions.”
Briefing:
Pakistan’s State Bank Stands Firm against Legalizing Crypto currency:
The State Bank of Pakistan (SBP) has reaffirmed its unwavering stance against granting legal status to digital currencies. Despite growing global interest and speculation, SBP remains resolute, advising all financial institutions to steer clear of crypto currency transactions.
In a recent statement to the BBC, SBP spokesperson Noor Ahmed clarified that the central bank’s position on cryptocurrency remains unchanged. Addressing rumors about potential government-level shifts on legalizing digital currencies, Noor Ahmed underscored that previous directives and circulars issued by SBP still stand strong. These directives explicitly prohibit banks, development financial institutions (DFIs), microfinance banks, and payment system operators from engaging in any activities involving cryptocurrencies. This includes trading, holding, transferring value, promoting, or facilitating payments and investments linked to digital assets.
Warning the Public of Risks by State Bank:
The State Bank has continuously cautioned the public about the severe risks tied to cryptocurrency investments, highlighting their volatile nature and lack of legal safeguards. SBP emphasizes that the speculative nature of digital assets poses significant threats to investors, making it imperative to maintain its restrictive policies.
The Global Crypto currency Divide:
While SBP remains steadfast, the global cryptocurrency landscape tells a diverse story.
- El Salvador, the pioneer in adopting Bitcoin as legal tender in 2021, took this bold step to revitalize its remittance-driven economy. Despite warnings from global institutions, the country heavily invested taxpayer funds into Bitcoin.
- The Central African Republic In 2022, the Central African Republic made history as the second country to officially recognize Bitcoin as legal tender, carving its own path in the global financial landscape.
- Switzerland, Singapore, and Portugal have introduced lenient tax regulations, making them crypto-friendly nations, while Malta has earned the title of “Blockchain Island” for its progressive crypto policies.
- Canada, Australia, and the UK regulate cryptocurrency adoption, allowing its use but enforcing tight regulations with tax laws.
In stark contrast, nations like China, Saudi Arabia, and Afghanistan have imposed outright bans on cryptocurrencies, citing financial stability concerns. India has not legalized cryptocurrencies but imposes taxes on transactions, showcasing a cautious approach.
SBP’s Steadfast Vision:
Rumors about Pakistan moving toward digital currency legalization have persisted for years, yet SBP has consistently denied such claims. In September 2023, the central bank firmly refuted media reports suggesting any shift in its stance. The then-spokesperson, Abid Qamar, categorically dismissed these speculations, reinforcing SBP’s commitment to protecting Pakistan’s financial system from the risks associated with unregulated digital currencies.
As the cryptocurrency debate intensifies globally, Pakistan’s State Bank remains a vigilant guardian of financial stability, prioritizing caution over trend-chasing. For now, the message is clear: cryptocurrencies have no place in Pakistan’s legal or financial framework.
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