Pakistan is set to introduce regulations for digital currencies as part of its action plan pertaining to the Financial Action Task Force (FATF), reports local media outlet The Express Tribune, April 1, 2019.
Government to Issue Licenses to Crypto Exchanges
In a bid to mitigate the use of cryptocurrencies to finance acts of terrorism and other illicit activities, Pakistan’s federal government will today unveil the Electronic Money Institutions (EMIs) regulations. These regulations are said to be the country’s first step towards regulating cryptocurrencies, something it has avoided for a long time.
Citing sources close to the Finance Ministry, The Express Tribune states that the newly unveiled regulations will monitor and regulate the use of digital currencies in the country.
An official ceremony is scheduled to take place on April 1, 2019, at the Islamabad office of the State Bank of Pakistan (SBP) to commemorate the introduction of new cryptocurrency regulations. The ceremony will be attended by several high-profile individuals including Federal Minister for Finance Asad Umar, SBP governor Tariq Bajwa, and finance secretary Younus Dhaga, among others.
Sources said that the FATF had warned countries of the use of digital currency trading platforms by terror organizations and suggested an action plan around which the soon-to-be-unveiled regulations revolve at large.
The sources added:
“These regulations will help combating money laundering and terrorism financing while it will also help regulation of digital currency throughout the country.”
The FATF, in their report, also highlighted the possibility of terrorist organizations using cryptocurrency exchanges for money laundering purposes. The report essentially states that digital currencies offer opportunities to carry out a range of illegal activities such as terror financing, tax evasion, and money laundering.
The international organization also noted that controlling cryptocurrencies could prove to be a hard task for future governments, for which immediate regulations were required.
Now, Pakistan is implementing the recommendations highlighted by the FATF in the form of the Electronic Money Regulations (EMR.) These regulations will act as a litmus test to determine whether an EMI deserves an operating license from the government. The government will also have the power to cancel or suspend EMI’s licenses if they’re found to be deviating from the established set of rules and regulations.
One-Upping their Neighbors
The introduction of new cryptocurrency regulations undoubtedly places Pakistan ahead of their rivals India in the emerging digital assets space.
As reported by BTCManager on March 28, 2019, India’s apex court was poised to hear the long-stretched case on cryptocurrency regulations in the country. However, much to the dismay of the Indian crypto-enthusiasts, the court on March 29, 2019, postponed the hearing to the second week of July 2019.