Pakistan moves against illegal cryptocurrency services, transactions

By Aamir Latif

KARACHI, Pakistan (AA) - Pakistan on Wednesday decided to take measures against illegal cryptocurrency services available online and digital currency transactions carried out through the internet in the country.

State Minister for Finance Aisha Ghous Pasha told a meeting of the Senate's Standing Committee on Finance that the decision has been made in line with the conditions set by the Financial Action Task Force (FATF), a 36-nation global anti-terror financing watchdog.

The country's central bank, the State Bank of Pakistan (SBP), and the Information Technology Ministry have already begun working on curbing the digital currency services in the country, she said, adding that Islamabad will "never" legalize cryptocurrency.

Although Islamabad banned trading and mining virtual currencies in April 2018, there is still a growing mining industry, local broadcaster Geo reported, adding that many mining farms have been shut down since the ban was implemented.

Despite the "high risk" involved in the business, Pakistan has seen a boom in cryptocurrency trading and mining, with the increasing interest of people in related social media videos and online exchange transactions.

Most exchanges operate through ghost partners and are never detected by regulators.

"FATF had set a condition that cryptocurrency will not be legalized," State Minister for Finance Pasha said, referring to Islamabad's removal from the FATF's list of jurisdictions under increased scrutiny in October last year.

Director SBP Sohail Jawad told the meeting that the cryptocurrency global market has shrunk from $2.8 trillion to $1.2 trillion.

Pakistan had remained on the watchdog's radar since June 2018, when it was placed on its gray list for terrorist financing and money laundering risks following an assessment of the country's financial system and security mechanism.