Pakistan’s central bank and federal government have recommended a sweeping ban on crypto assets in a damning new report.
The joint report, submitted to the Sindh High Court yesterday evening, recommended a stringent ban on crypto assets as well as penalties against digital asset exchanges. The news was first reported by local media and confirmed to City A.M. by a spokesperson for the State Bank of Pakistan.
The new guidance comes after the Lahore High Court urged the federal government and central bank to clarify the law around digital assets in October amid a high profile court case involving the creator of fraudulent crypto currency Bither Cash.
Pakistan’s State Bank and Federal Government determined that crypto assets are illegal and cannot be used for trade. The report also set out the risks involved with trading crypto currency and cites investigations by Pakistan’s Federal Investigation Agency against crypto exchanges Binance and OctaFx.
Although the Central Bank and government have set out a recommendation for the legal status of crypto assets the ban is not yet set in stone. The Sindh High Court will send the report to the finance and law ministries for a final decision and the ministries will jointly determine whether a ban is constitutional before creating a legal framework for the assets.
If the ban enters into law, Pakistan will join countries including China and Saudi Arabia which have already declared digital assets illegal.
While it is as yet unclear what rule changes would mean for individual traders in Pakistan, who hold an estimated $20bn between them according to the Federation of Pakistan Chamber of Commerce and Industry, outlawing digital assets and exchanges threatens to clip the wings of the nascent crypto industry.