Pakistan Plans New Digital Currency Regulations Following FAFTA’s Urging
Pakistan plans to implement a licensing system for electronic money institutions as a way to regulate digital currencies.
Pakistan is implementing new cryptocurrency regulations in an effort to improve its track record fighting financial crime, English-language Pakistani news outlet The Express Tribune reported on April 1.
Pakistan, which is seeking to reduce perceived levels of crime such as money laundering and terrorist financing, will now introduce a licensing scheme for electronic money institutions. According to Pakistani news outlet Dunya News, cryptocurrency trading has been banned in the country since April last year.
“These regulations will help combating money laundering and terrorism financing while it will also help regulation of digital currency throughout the country,” The Express Tribune quoted unnamed sources as saying about the new initiative, whose specifics are vague.
A ceremony related to the regulations’ introduction will take place at the offices of Pakistan’s central bank, the State Bank of Pakistan, on Monday, attended by federal minister for finance Asad Umar and the bank’s governor, Tariq Bajwa.
According to the sources, the move was in part a reaction to demands from international monitoring body the Finance Action Task Force (FATF), which has repeatedly voiced concerns about cryptocurrencies’ role in terrorist financing.
In February, the FATF further noted that Pakistan had made insufficient progress with an action plan for combating the phenomenon in general.
“Given the limited progress on action plan items [...] the FATF urges Pakistan to swiftly complete its action plan, particularly those with timelines of May 2019,” Reuters quoted a statement as saying.
Last week meanwhile, Pakistan’s finance regulator, the Securities and Exchange Commission (SECP), announced it was taking action against nine companies accused of using cryptocurrency as part of illegal operations.
“Such schemes, offering hefty profits and incentives can deprive the unsuspecting public of their hard-earned money who fall prey to the inducements,” an accompanying statement read. It continued:
“It is further clarified that a mere registration of a company with SECP does not mean that it can get involved in unauthorized and unlawful activities.”