There has been a boom in trading and mining cryptocurrency in recent times in Pakistan with thousands of views of relate videos on social media as well as transactions on online exchanges showing the growing interest in the country.
The global money laundering watchdog, the Financial Action Task Force (FATF), has urged the Pakistani government to better regulate the cryptocurrency industry even though digital currencies are not illegal in the country.
Pakistan has been put on the grey list of the FATF, which is a list of countries it keeps a watch on, with regards to identifying the levels to which countries are able to check terror financing and money laundering.
A committee to study cryptocurrency regulation has been now set up by the Pakistani government in response to the call by the FATF and comprises of observers from the global watchdog, federal ministers of the country, and heads intelligence agencies of the country.
“Half the members had no clue what it was and didn’t even want to understand it,” said committee member Ali Farid Khwaja, a partner at Oxford Frontier Capital and chairman of KASB Securities, a stock brokerage in Karachi.
“But the good thing is someone set up this committee. The relevant bodies in the government who need to get things done are supporting it, and the promising thing is nobody wants to stand in the way of technical innovation.”
The central bank of Pakistan was looking into another digital asset, a central bank digital currency, the head of the central bank, Reza Baqir, said in April, while also stressing on the potential for bringing into a regulatory framework all transactions taking place off the books.
“We hope to be able to make some announcement on that in the coming months,” Baqir said in a television interview.
A grant of $4.1 million for examining the technology from Stacks, a blockchain network that links Bitcoin to apps and smart contracts, was given to the Lahore University of Management Sciences, one of the leading universities of Pakistan, in February.
Cryptocurrency advocates think that the moves come at an opportune time.
People involved in the trade of cryptocurrency are often viewed with suspicion by institutions at times over concerns of possible association of such people with money laundering.
According to reports, Pakistan’s Federal Investigation Agency (FIA) has been active on occasions against traders in cryptocurrencies – even arresting them and charging them with money laundering – but often the charges do not hold up in court.
However there is growing interest in cryptocurrencies in Pakistan.
There is an abundance of social media groups that seek to explain how to do trading and mining of cryptocurrencies in Pakistan with such groups having tens of thousands of followers on Facebook. Cryptocurrency videos in Urdu on YouTube have had hundreds of thousand d of views.
Hundreds of Pakistani crypto traders are listed, some having made thousands of transactions, in online cryptocurrency exchanges mostly based outside of the country – such as Localbitcoins. \
(Adapted from Dawn.com)