Pak central bank panel recommends complete ban on cryptocurrency

business-standard.com:

A panel of Pakistan's central bank has recommended a complete ban on cryptocurrency and other related activities in the country, according to a media report on Thursday, days after a top court ordered a probe into a USD 100-million digital currency fraud.

After the scam became public, the Sindh High Court (SHC) directed the State Bank of Pakistan (SBP) to constitute a committee under the bank's Deputy Governor to probe the fraud.

The other members of the panel were from the ministries of finance, information-technology, the telecommunication authority, and the Security and Exchange Commission.

The court sought the committee's opinion on whether any form of cryptocurrency could be permitted under Pakistani law, The News International reported.

In its report, the committee suggested a complete ban on all cryptocurrency and other related activities in the country.

Based on a risk-benefit analysis, it has come to light that the risks of cryptocurrencies "far outweigh" its benefits, the newspaper reported.

The committee observed cryptocurrency was traded in speculation, where people could be enticed to invest for short-term capital gains.

The committee explained such enticement may result in the flight of precious foreign exchange reserves, as well as transfer of illicit funds from the country.

The committee said there must be a ban on unauthorised operations of cryptocurrency exchanges, stating that exchanges like Binance, OctaFx, among others, should be banned for their unauthorised operations, while proportionate and dissuasive penalties should be imposed on them.

Meanwhile, a petitioner at the SHC opposed the recommendations.

The SHC's division bench, headed by Justice Mohammad Karim Khan Agha, directed the committee to