Here's why Pakistan plans to ban use of cryptocurrencies

The status of cryptocurrencies in Pakistan has been in limbo in the absence of laws and rules to regulate the use of these digital currencies for trade.

Islamabad:Pakistan has decided to ban the use of all cryptocurrencies, local media reported, citing a report which was submitted to the Sindh High Court (SHC) on Wednesday.

Samaa TV reported that the State Bank of Pakistan and the federal government have decided to ban the use of all cryptocurrencies, as per the report submitted to SHC during a case hearing about digital currencies. The status of cryptocurrencies in Pakistan has been in limbo in the absence of laws and rules to regulate the use of these digital currencies for trade.

On October 20, the Sindh High Court told the federal government to regulate cryptocurrencies within three months. The court directed the government to form a committee headed by the federal secretary of finance to determine the legal status of cryptocurrencies, Samaa tv reported. The court had instructed the authorities to come up with a report on the use of cryptocurrencies.

Earlier, Pakistan's Federal Investigation Agency (FIA) has issued a notice to Binance, a cryptocurrency exchange, during the investigation of a cryptocurrency scam involving around 100 million US dollars. Through a notice, FIA's cybercrime wing has called the general manager or growth analyst of Binance Pakistan to appear and explain the organization's position on the fraud, as per media reports.

"A relevant questionnaire has also been sent to Binance Headquarters Cayman Islands and Binance US to explain the same," the FIA statement read. Last month, people from all over Pakistan launched complaints to the FIA against at least 11 mobile applications which had stopped working over a period of time and allegedly defrauded their billions of Pakistani rupees, Xinhua reported citing FIA.

Reports say that the people of Pakistan have purchased cryptocurrency worth USD five crores in just six months. At least 1,064 people belonging to various private banks and foreign exchange firms carried 2,923 transactions worth billions of Pakistani rupees, according to Pakistan's vernacular media.

FIA has started searching for investors and funders and as many as 1,054 accounts have been frozen. In October 2021, a study revealed that Pakistan had witnessed a massive increase in cryptocurrency adoption during the past 12 months. The 2021 Chainalysis Global Crypto Adoption Index ranked Pakistan the third highest in terms of index score, Daily Pakistan has reported.

(ANI)