Pakistan Moves to Ban Crypto Trading: FATF Compliance at the Forefront
• Pakistan’s government has stated that it would ban cryptocurrency services operational in the country and would never legalize crypto trading.
• The announcement was made by Aisha Ghaus Pasha, the Minister of State for Finance and Revenue, during a session of the Senate Standing Committee on Finance and Revenue.
• The Pakistani economy is facing an unprecedented crisis, with the government engaged in tense negotiations to secure a bailout package from the International Monetary Fund (IMF).
Pakistan Government Announces Crypto Ban
Pakistan’s government has taken a hard stance against cryptocurrencies by announcing that it will ban all crypto services operating in the country and never legalize crypto trading. The announcement was made by Aisha Ghaus Pasha, Minister of State for Finance and Revenue, during a session of the Senate Standing Committee on Finance and Revenue on 16 May 2021.
Reason Behind Ban
The ban is part of Financial Action Task Force (FATF) requirements which recently removed Pakistan from its gray list of countries deemed to lack Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) measures but are working to ensure compliance. FATF’s findings may influence government policy globally. In 2022, the State Bank of Pakistan announced that it planned to ban crypto as well. Other banks have also started informing customers that cryptocurrency trading is illegal.
Consequences Of Ban
The Pakistani economy is going through an unprecedented crisis due to which FATF compliance when it comes to cryptocurrencies becomes necessary for securing bailout packages from international organizations such as IMF. However, this move has been met with disapproval from members of Pakistan’s crypto community who believe that officials are destroying their country in order to comply with FATF guidelines.
Legislation To Implement Ban
The State Bank of Pakistan and Ministry of Technology are reportedly working together towards drafting legislation for implementing this ban across Pakistan. If successful, this will mean complete prohibition on any local or foreign firm offering any type of service related to virtual currencies within the country’s borders.
Despite pushback from members of its crypto community, Pakistan appears determined to impose a comprehensive ban on all activities related to cryptocurrencies within its borders as part of FATF’s requirements for AML/CTF compliance measures meant at improving economic stability within the country.