Pakistan’s central bank bans crypto and ICO trading

Just after the yesterday’s report where India’s central bank imposed a ban on financial firms to deal in cryptocurrency, now State Bank of Pakistan, country’s central bank has issued a warning to all banks, payment services providers and the general public not to trade in bitcoin or other cryptocurrencies.

The State Bank of Pakistan (SBP) cites cryptocurrency investment as highly risky due to its volatile nature and highly unstable as their prices are based on speculations. In a statement released yesterday, State Bank has said that trading of Bitcoin, PakCoin (a local market coin), Lite Coin is illegal in Pakistan and they have not issued licenses for any of these entities. As the SBP states,

“Virtual currencies/coins/tokens like Bitcoin, Litecoin, Pakcoin, OneCoin, DasCoin, Pay Diamond etc are neither recognized as a legal tender nor has SBP authorized or licensed any individual or entity for the issuance, sale, purchase, exchange or investment in any such currencies… in Pakistan.”

Furthermore, the central bank has also issued a warning to banks and payment service providers not to facilitate any cryptocurrency or ICO related transactions. The authority states, “Banks/ DFIs/ microfinance banks and payment system operators/ payment service providers have been advised not to facilitate their customers/account holders to transact in virtual currencies/ initial coin offerings, tokens vide BPRD’s Circular No. 03 of 2018.”

After this announcement, local crypto exchanges have started following new rules. Urdubit, a cryptocurrency exchange that was launched back in 2014, has said that it will shut down. Urdubit was the first bitcoin exchange platform to open its doors in the country. The company announced its decision via Facebook, urging its customers to “please withdraw your funds as soon as possible.”

Meanwhile, the State Bank has also warned the persons using such currencies for the purpose of transferring value outside Pakistan that these people are subject to prosecution as per the applicable laws. SBP has declared that “no entity is currently licensed or authorized by SBP to offer money remittance services and products in Pakistan using virtual currencies/ coins/tokens.”

Bitcoin and altcoins are seeing a huge dip in prices in the wake of harsh statements and regulations issued by various government authorities around the globe.