Pakistan’s Minister of State for Finance, Aisha Ghaus, stated that the country could not legalize cryptocurrency trading due to its recent removal from the Financial Action Task Force’s (FATF) “Grey List” and concerns about terror financing. During a Senate Standing Committee on Finance meeting, the minister explained that FATF had imposed strict conditions for using cryptocurrencies before removing Pakistan from the list in October 2022. The FATF’s controversial “travel rule” required countries to collect and share information on crypto transactions to curb money laundering and other illicit use.
The minister’s statement is consistent with the State Bank of Pakistan’s (SBP) earlier declaration that crypto is not a legal tender or backed by the government. SBP officials referred to cryptocurrencies as total fraud and emphasized that they would never be recognized in the country. They also pointed to anti-crypto moves in major economies like the U.S., China, and Canada as reasons for Pakistan to make a similar move.
The Senate Standing Committee directed the SBP and the Ministry of IT & Telecom to work on banning cryptocurrency trading, which would involve banning all cryptocurrency-related websites and services. This is part of the global regulatory crackdown on the cryptocurrency industry following the significant decline in its market cap and the fraudulent activities of some key participants.
Despite being ranked among the top 10 countries with high crypto adoption in 2022 by Chainalysis, Pakistan cannot legalize cryptocurrency trading due to its recent removal from FATF’s “Grey List” and concerns about terror financing. The country’s government is following the lead of major economies in banning crypto-related activities, emphasizing its commitment to preventing money laundering and other illicit activities.