Cryptocurrencies are arguably one of the most sought-after investments in the world today. A medium which has taken the world by storm, financial markets are intrigued by its volatility and its meteoric rise in the past couple of years. 2017 saw cryptocurrencies fluctuating at unprecedented rates as bitcoin went up to near $18,000 by late 2017.
As a result of this exponential increase, investors and non-investors alike wish to purchase a portion of this currency in hope to maximize their profits. Pakistanis on the other hand, seem to miss out on this opportunity as the State Bank of Pakistan have recently announced that they have banned cryptocurrencies in the country.
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At a merchant level, the usage and acceptance may be negligible, but on an individual basis, users are tempted to trade given the very promising returns it offers. The growth of cryptocurrency in the previous year resulted in people in the country opting to take multiple routes in order to obtain the currency and open accounts in various exchanges. However, as stated by the official statement of the State Bank on their website:
“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.”
This implies that all virtual currencies such as Bitcoin, Pakcoin and Litecoin etc are all illegal according to the government of Pakistan.
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This also implies that all financial institutions are banned form exchanging, promoting or transferring in the currency as well. This also includes microfinance banks and payment service providers from investing in the virtual currency.
The State Bank of Pakistan concluded with their statement by highlighting that they will “not facilitate their customers/account holders to transact in VCs/ICO Tokens. Any transaction in this regard shall immediately be reported to the Financial Monitoring Unit (FMU) as a suspicious transaction”.
As cryptocurrencies are still growing and have potential to expand even further, this proves to be a massive blow to investors in Pakistan who would want to capitalize on its growth.