SEC of Pakistan discusses Cryptocurrency Regulations while there is no Ban on Cryptocurrency, confirms Central Bank
The Securities and Exchange Commission of Pakistan has issued a consultation paper regarding the rules and regulations of the cryptocurrency trading platforms. Apart from explaining the concepts and definitions of cryptocurrencies, the prospectus explores different regulatory procedures adopted globally.
The regulations given in the paper include recommendations by the Financial Action Task Force (FATF) and also suggestions are taken from regulations prevailing in the U.S., Malaysia, and Hong Kong. It also describes how cryptocurrency could be acknowledged in Pakistan.
According to reports, the consultation paper emphasizes crypto assets issued by non-central banks or non-government and not on digital currencies issued by the central bank.
There are two approaches that are discussed in the paper for regulating cryptocurrencies. Firstly, the regulations of cryptocurrency can be restricted to existing regulations and in some cases, it may necessitate outright banning.
Secondly, cryptocurrency can be regulated on the basis of the presumption of let – things – happen approach as described by the Commodity Futures Trading Commission (CFTC) because according to do – not – harm approach, the financial sector is dynamic and the associated must innovate is vigorously emphasized.
According to the Securities and Exchange Commission of Pakistan, the consultation paper is mainly formulated on the basis of the second approach. Additionally, it intends to conduct several discussion sessions.
Simultaneously, the central bank confirms that cryptocurrency is yet not banned. In accordance with the central bank's lawyer, the central bank furnished a warning regarding dealing with cryptocurrencies but did not ban them.
On 6th April 2018, the central bank of Pakistan issued a circular in order to advise banks, financial institutions like payment service providers to abstain from holding, using, transforming, trading, etc.
The circular issued by Pakistan’s central bank is similar to the one furnished by India’s central bank, the Reserve Bank of India (RBI). In March, the RBI circular was revoked by the supreme court of India, and the banking ban was rescinded in India.
Crypto Business World
CBW - External Analyst