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Crypto-currency regulation

Netizens, mainly those dealing in the crypto-currency business, are calling for an immediate removal of a ban imposed by the State Bank of Pakistan in April 2018 on the use of all types of digital alternatives of cash due to the absence of any regulatory regime. The demand picked up momentum after social media celebrity, Waqar Zaka, announced holding a march against the indefinite ban on the use of crypto-currency in Pakistan. According to Zaka, the government only understood when people staged a protest at D-chowk. “So, if Crypto is not regulated, I will call for our first Dharna (sit-in), where I will do LIVE Future Trading,” Zaka had said.

Earlier in October last, the Sindh High Court had asked the Finance Department, State Bank of Pakistan, Finance Department and Security Exchange Commission of Pakistan (SECP) why crypto-currency was not allowed in the country. The court observed that prima facie in many countries, it seems that regulating banks and their exchange commission put in place safeguards to ensure that the use of crypto-currency is allowed, but subject to restrictions so that money laundering, terrorist financing and other illegal banking transactions are avoided. The court observed that Pakistan needs to move with the time and should embrace crypto-currency business or otherwise and regulate the same.

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In Pakistan, uncertainty prevails regarding the use of this new form of digital currency, yet it is getting space in the commercial markets of the country. One thing is sure that regulation of this new form of currency trade is essential in order to curb frauds and scams. Measures are needed to curb crypto-currency speculation and scams. Yet the government does not need to look coldly upon crypto-currency. What Pakistani authorities can do is that they must end crypto-currency speculation but not nip the revolutionary technology in the bud. It would be irresponsible of the government only to try to not regulate crypto-currencies, unlike the US and Japan which are trying to induce a soft landing. Government regulations over crypto-currency trading must be focused on minimising its side effects and curbing the speculation frenzy. And discussions from various angles are needed as well to avoid missing out on a future technology.

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