The central bank of Pakistan, i.e. State Bank of Pakistan, ended months of neutral stance by formally issuing a notice on Bitcoin &/or Virtual Currencies.
In a Banking Policy & Regulations Department (BPRD) Circular # 3 of 2018, State Bank of Pakistan has officially put a Prohibition of Dealing in Virtual Currencies/Tokens. It also confirms my stance that SBP follows the action of what Reserve Bank of India (RBI) does, as they recently banned all banks & financial institutions from dealing in cryptocurrencies & tokens. SBP never really had the brains (or the self-confidence) to make decisions on their own or those decisions that could have given Pakistan an edge, without necessarily an external impetus.
I am not a lawyer, but interestingly enough, State Bank has given an opinion. That these currencies are NOT legal tender and hence, all Banks, DFIs Microfinance Banks, and PSPs /PSPs are barred from dealing and/or promoting them in any manner whatsoever.
Regarding my previous article Legal State of Bitcoin in Pakistan, Bitcoin has not been made illegal (please correct me if I am wrong), for this to happen, a specific piece of legislation needs to come out in the penal code system that explicitly bans it, as a non-tender item. SBP’s purview and umbrella coverage only extend to legal tender and/or asset value class systems and the entities that SBP regulates.
So at best, SBP can only bar these institutions from dealing with, handling, promoting, etc. Bitcoin/Cryptocurrencies/Tokens.
If you used Bitcoins now, after this circulation in conjunction with the Fiat currency as issued by Pakistan or any other fiat currency as regulated by SBP, you could possibly be charged under some law (albeit I don’t know which one). Banks would be the main culprits here, who would be taken to task.
This is indeed a sad state of affairs in our country. As I have previous stated, the damage and injustice done to this country by most of the bureaucracy and incompetent people at the helm of affairs in various institutions, including politicians is an unpardonable offense.
SBP could have made a difference here (Read: Will Japan Overtake The Cryptocurrency Race?). We could have been our own version of Japan. Only history will tell, yet once again, how incompetency at State Bank of Pakistan, deprived the future generation of innovation and growth.
I believe, one can still buy/sell crypto, just figure out a way to do it without touching fiat money.
All in all, a step in the wrong direction in my opinion. Rarely has SBP done anything right.
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This page was last updated on September 1, 2022.
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