SBP says collaborating with Pakistan Crypto Council on regulatory framework for virtual assets

The State Bank of Pakistan (SBP) on Friday clarified that it was collaborating with the Pakistan Crypto Council (PCC) to develop a comprehensive legal and regulatory framework for virtual assets (VAs), following recent media reports that suggested cryptocurrencies are illegal in the country.

The SBP and the Ministry of Finance on Thursday said the cryptocurrency is not legal in Pakistan and trading of cryptocurrencies is not permitted in the country.

Both the SBP and the Finance Ministry stressed the need for a robust legal framework for trading of cryptocurrency in the country. “Presently, cryptocurrency is banned in Pakistan,” they said. This was disclosed by officials of SBP and Finance Ministry during a meeting of National Assembly Standing Committee on Finance.

“The SBP and Finance Division are currently engaged with the Pakistan Crypto Council established by the federal government for, among others, developing an appropriate legal and regulatory framework for VAs in Pakistan.

“We understand that the legal and regulatory framework would provide the requisite clarity and legal coverage about the VAs ensuring consumer and investor protection,” SBP said in a press release.

The statement further said the central bank in 2018 advised its regulated entities including banks, Development Finance Institutions (DFIs), Microfinance Banks (MFBs), Electronic Money Institutions (EMIs), Payment System Operators (PSOs), Payment Service Providers (PSPs), and Exchange Companies to “avoid dealing in virtual assets due to the absence of any legal and regulatory framework for the VAs; not because it was declared illegal in the country”.

“This was done to protect its regulated entities and their customers from the risks emanating due to the absence of legal and regulatory framework for VAs in the country,” it said.