Pakistan has decided to break all its ties with cryptocurrencies. Minister Aisha Ghaus Pasha declared these digital assets would never be legalized in the country. 

Reportedly, cryptocurrencies would not be legalized due to the conditions set by the Financial Action Task Force. The Minister of State for Finance and Revenue also mentioned that the State Bank of Pakistan (SBP) and the Information Technology Ministry are working on banning cryptocurrencies. The SBP first made its intentions clear on cryptocurrencies in January 2022.

The crypto ban is starting to affect the operations of some banks. Now, crypto trading in banking institutions is regarded as illegal.

Local news outlet Dawn reported last month that Pakistanis could no longer use their debit or credit cards to trade cryptocurrencies. However, cryptocurrencies have become more prevalent in the country. Dawn reported a 25% increase in the yearly trading volume for wallets owned by Pakistanis. The current annual trading volume is $25 billion, as reported by Zeeshan Ahmed, the country general manager at Rain Financial.

Phander Lake of Pakistan
Phander Lake of Pakistan

Pakistan’s Current Political Crisis

The proposed crypto ban was announced during the ongoing political turmoil in Pakistan. Last week, former prime minister Imran Khan was arrested after being charged with corruption. Khan claimed he was “detained on incorrect charges” and called upon his supporters to “struggle” for their rights. 

The ex-prime minister was released shortly after the country’s Supreme Court deemed the arrest unlawful. However, Khan is currently in a standoff with the police in Lahore, his hometown. His supporters have begun protesting, leading to the deaths of 8 people and over 300 injured. About 1600 protesters have been arrested in various provinces in the country. Retailers have begun hedging their bets against the weakening Pakistani rupee.

The chairman of KTrade Securities, Ali Farid Khwaja, stated that many of his fellow citizens are purchasing USDT on exchange platforms to get exposed to the American dollar. Khwaja, also the CEO of BlockTech Pakistan, shared that over 20 million Pakistani accounts were created during the crypto run.

Not Everyone Is A Fan Of Crypto

Countries like Russia, Algeria, Bolivia, and Ecuador, have banned using cryptocurrencies for payment. Earlier this year, France placed a ban on influencers that promoted the use of cryptocurrencies. Furthermore, European lawmaker Johan Van Overtveldt suggested a strict prohibition on cryptocurrencies due to the banking sector’s crisis.