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| he crypto market rose to $3 trillion (roughly Rs. 2,15,66,720 crore) last year |
After El Salvador made Bitcoin a legal tender in September last year, the crypto culture witnessed expansion in several parts of the world. However, the crypto sector could likely encounter obstacles in Pakistan. The central bank of Pakistan is reportedly considering a ban on all cryptocurrencies from operating in the country. As per Chainalysis' Global Crypto Adoption Index, Pakistan ranks third amongst the top 10 countries with the highest number of crypto users.
The State Bank of Pakistan (SBP) has submitted a document to the Sindh High Court, calling cryptocurrencies like Bitcoin “illegal” and unusable for trade purposes, as per a report by Samaa.
The SBP has also reportedly suggested that fines must be levied against crypto exchanges operating in Pakistan.
The submission handed over to the court by the SBP has cited at least 11 countries, including China and Saudi Arabia, which have imposed restrictions on the crypto space.
As of yet, the court has not announced its final stance on the legal status of cryptocurrencies in Pakistan.
This is not the first time that the SBP has called for a ban on cryptocurrencies and other related activities.
In April 2018, the apex financial institution of Pakistan had initiated a prohibition on dealing in digital currencies. This did not stop crypto enthusiasts to experiment with the sector regardless.
Recently, crypto exchange Binance has been roped into legal issues in Pakistan. The Federal Investigation Agency (FIA) of Pakistan will probe users complaints alleging that the crypto exchange made them transfer funds into unfamiliar third-party wallets. The scam is estimated to have costed people a collective total of around $100 million (roughly Rs. 740 crore).
Meanwhile, nations like India and Russia, among others, are also mulling over ways to regulate the crypto space.
Since cryptocurrency transactions are decentralised and untraceable in nature, governments around the world fear that they could be used to facilitate unlawful activities such as money laundering and terror financing. The volatility of the crypto market is another issue for authorities to observe before legalising the sector.
The excessive electricity consumption linked to crypto mining has also become a matter of concern in many parts of the world, including Iran and Kazakhstan.
Despite the roadblocks, the cryptocurrency market rose to $3 trillion (roughly Rs. 2,15,66,720 crore) last year, the highest it has even been.
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