The State Bank of Pakistan (SBP) has taken a firm stance against cryptocurrencies by issuing a circular that bans dealing in digital currencies. Signed by the governor of the State Bank of Pakistan, the directive moves the country decisively into a crypto-skeptical position.
Strict measures
The circular leaves little ambiguity. Commercial banks and payment service providers are prohibited from facilitating or enabling cryptocurrency transactions. The directive states that the use, trading, holding, transfer and investment in blockchain-based currencies and related technologies are banned. Any financial institution found to be engaging in these activities will be reported immediately to the Financial Monitoring Unit of Pakistan.
Following publication of this circular, participating officially in cryptocurrency activities within Pakistan is now forbidden. The restrictions target more than just businesses and financial institutions.
Increased surveillance
The circular also addresses Pakistani citizens directly. The central bank warns against risky investments in cryptocurrencies and warns that anyone sending money in virtual currencies—even to recipients abroad—will face immediate legal action.
In the same vein, the State Bank of Pakistan strongly discourages all activities related to digital currencies. Mining, exchanging, promoting or otherwise facilitating cryptocurrencies on Pakistani soil is expressly discouraged. The message is clear: residents should steer clear of these digital assets.
It is important to note that this is a circular, not a law; no new legislation has been enacted. Nevertheless, the SBP’s decision is unequivocal and signals an unfavourable environment for Bitcoin and other cryptocurrencies. This directive is likely to have ripple effects on the virtual currency market and on related services operating in or with Pakistan.