Pakistan is taking steps to legalise cryptocurrency as the government proposes amendments to the State Bank of Pakistan (SBP) Act, indicating a significant shift in its financial policy.
As reported by local news outlet The Express Tribune, these amendments would empower the SBP to issue digital currency and oversee the management of the nation’s money in both physical and digital formats.
The proposed amendments also aim to give the SBP the authority to engage in “central bank digital currency” activities, with CBDCs potentially serving as legal tender. According to the report, the central bank intends to create a subsidiary focused on developing and managing digital payment systems.
Earlier this year, Pakistan’s central bank recommended a ban on cryptocurrency, arguing that allowing it could lead to capital flight. This position was outlined in documents submitted to the Sindh High Court, which was reviewing a constitutional petition aimed at reversing the central bank’s 2018 guidance against processing and investing in virtual currencies.
A committee led by a deputy governor of the central bank reported that cryptocurrency trading contributed to foreign exchange outflows, as these assets were issued outside of Pakistan, resulting in capital being sent abroad.
However, the proposed amendments also introduce penalties for the unauthorised issuance of digital currencies, imposing fines that amount to twice the value of any illegally created currency, according to the report.
Although a specific timeline for federal cabinet approval of the amendments has not been disclosed, these changes could reshape the conversation around regulatory oversight and incorporating digital currencies into Pakistan’s financial framework.
Additionally, the amendments would broaden the SBP board’s powers, allowing it to approve a wider array of financial reports and improve governance processes.
This news follows earlier reports of Pakistan’s plans to introduce a central bank digital currency (CBDC) aimed at modernising financial transactions and enhancing accessibility, particularly for marginalised groups like women. Finance Minister Muhammad Aurangzeb highlighted that a CBDC could help address issues of financial abuse, where cash is often controlled by male family members, during his speech at the World Economic Forum in April.
If you want to read more news articles like this, visit DeFi Planet and follow us on Twitter, LinkedIn, Facebook, Instagram, and CoinMarketCap Community.
“Take control of your crypto portfolio with MARKETS PRO, DeFi Planet’s suite of analytics tools.”
