The Islamic Republic of Pakistan is reportedly planning to formulate a comprehensive set of cryptocurrency regulations.
As first reported by local news sources, Pakistan, a country with a population of about 200 million and a GDP of around $270 billion, is set to develop regulations for digital assets including Bitcoin (BTC).
The country’s federal government, which oversees four different provinces, will be drafting new a legal framework for cryptos based on the existing Electronic Money Institutions (EMIs) regulations. This, after recently receiving recommendations from the nation’s Financial Action Task Force (FATF), a global monetary regulator.
Details Of New Regulatory Framework Not Shared Publicly
According to the Express Tribune, the details regarding the new cryptoasset regulatory framework have not been disclosed publicly. Moreover, local sources pointed out that draft regulations proposed in October 2018 by the State Bank of Pakistan (SBP), the nation’s central bank, noted that EMIs would have to satisfy a specific set of requirements.
These requirements are necessary before Pakistan’s federal government begins to evaluate whether to permit the use of cryptocurrencies in carrying out daily transactions, local news outlets revealed. Companies operating without adhering to these particular guidelines could potentially have their business licenses suspended or revoked.
Carefully Evaluating Risks Before Passing Regulations
In order to engage in cryptocurrency, or any type of financial transactions, incorporated companies in Pakistan have to follow a strict set of guidelines. These new laws appear to have become more comprehensive and are now being more regularly enforced after the new Imran Khan-led Pakistan Tehreek-e-Insaf (PTI) government took over last year.
In a similar way to other jurisdictions, Pakistan’s government is looking to ensure investor protection and perform customer due diligence. This includes responsibly managing sensitive user data such as government issued IDs, telephone numbers, personal addresses, and user funds.
Formulating Regulations To Help Prevent Financial Crime
Previously, the SBP had prohibited local financial institutions from offering banking services to those dealing in cryptocurrencies. However, it seems that Pakistani authorities may now be concerned about the potential risks associated with not properly regulating and not allowing the use of cryptos in legitimate transactions. This, after Pakistan-based criminals recently kidnapped a college professor and demanded that a ransom be paid in Bitcoin.
According to statements from local news outlets:
These regulations will help combating money laundering and terrorism financing while it will also help regulation of digital currency throughout the country.
Notably, the Financial Action Task Force (FATF), a global anti-money laundering authority, has revealed recently that Pakistan had not made substantial “progress” when it comes to preventing financial crimes involving terrorism financing (and other illicit activities).