Pakistan Senate Moves To Ban Cryptocurrencies

The Senate Standing Committee on Finance has directed the formulation of legislation to ban the use of cryptocurrencies in Pakistan. Minister of State for Finance, Ayesha Ghaus Pasha, informed the committee about the government’s intention to enact laws against cryptocurrencies. The State Bank of Pakistan (SBP) and the Ministry of Information Technology (IT) have already begun working on restricting cryptocurrency activities within the country.

Pakistan’s Firm Stance Against Crypto

Dr. Ayesha Ghaus Pasha emphasized that cryptocurrencies will never be legalized in Pakistan. Sohail Jabbar, Executive Director of Digital SBP, informed the committee that the cryptocurrency market has experienced a significant decline from $2.8 trillion to $1.2 trillion. He described cryptocurrencies as fraudulent and asserted that they will not be allowed in Pakistan. The Federal Investigation Agency (FIA) and the Financial Monitoring Unit (FMU) are taking actions against Pakistani investments in cryptocurrencies. China has also banned cryptocurrencies.

Akif Saeed, Chairman of the Securities and Exchange Commission of Pakistan (SECP), supported the ban proposal, stating that cryptocurrencies are high-risk assets with no benefits. He mentioned that major countries are now eliminating cryptocurrencies and recommended their prohibition. Saleem Mandviwalla, Chairman of the committee, expressed concerns about the significant amount of money invested by Pakistanis in cryptocurrencies. In response, Dr. Ayesha Ghaus Pasha referred to conditions imposed by the Financial Action Task Force (FATF) and stated that cryptocurrency dealings cannot be allowed as Pakistan strives to comply with FATF regulations.


Legislation and Punishment

Senator Farooq H Naik, a committee member, stressed the need for legislation regarding cryptocurrencies and proposed punishment for those involved in Pakistani cryptocurrency activities. He warned about the potential financial terrorism associated with cryptocurrencies and its negative implications for Pakistan’s international relations. The committee also discussed the increase in fees and the restoration of previously reduced fees by the SECP.

Dr. Ayesha Ghaus Pasha assured the committee that the upcoming budget for the new financial year will include bringing new sectors into the tax net. The government aims to increase the tax-to-GDP ratio to reduce the burden on common citizens. The Federal Board of Revenue (FBR) plans to raise the rate of direct taxes in the new budget and intends to broaden the tax net by including sectors currently outside its purview. The FBR Chairman, Asim Ahmed, provided an update on the collection of capital value tax and defended its imposition on domestic and foreign assets.