State Bank of Pakistan (SBP) has banned all forms of cryptocurrencies in Pakistan. In a circular issued on Friday, the central bank advised the people against using cryptocurrency in any kind of transactions in Pakistan.
According to the Central Bank, the cryptocurrencies like Bitcoin, Litecoin, Pakcoin, OneCoin, DasCoin, Pay Diamond or Initial Coin Offerings (ICO) tokens were neither recognized as a legal tender nor anyone was authorized or licensed to trade/use them.
“The SBP has not authorized or licensed any individual or entity for the issuance, sale, purchase, exchange or investment in any such virtual currencies/coins/tokens in Pakistan,” the central bank clarified its statement.
The circular also warned that no financial institution or investment house is permitted to let its clients engage in cryptocurrency related transactions.
Though Bitcoin is not doing great nowadays globally after its all-time high at the end of last year, the fame of the cryptocurrency has tempted many people to trade in it by opening accounts with various exchanges.
In Pakistan, the volume of the trade of cryptocurrencies is on the lower side as compared to many other countries and its acceptance on the merchant level is very nominal.
State Bank rationalizes its decision by stating, “Virtual Currencies/Coins/Tokens provide a high degree of anonymity and potentially can be used for facilitating illegal activities.”
In February this year, FIA also started crackdown against OneCoin and Bitcoin traders in Pakistan as the trading of cryptocurrencies is not recognized in the country.
According to Kenneth Rogoff Harvard University’s Professor and Economist, Bitcoin has a higher likelihood to fall to $100 than being traded at $100,000 ten years from now which makes us wonder if the Bitcoin bubble will soon see its end.