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Friday, March 31, 2023
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EditorialIn the world of cryptocurrency

In the world of cryptocurrency

With our well-known abhorrence towards new technologies and innovations, it was not surprising when the parliament learned that the government was not keen on introducing cryptocurrency in the country. In response to a call-attention notice about non-formulation of a regulatory framework for cryptocurrency in the country, Minister of State Ali Muhammad Khan said that the government was not in a hurry to consider any regulatory framework, citing a cautionary message of the central bank that the government must brood on the issue and take a step towards it after broad consultation so that the investors and depositors do not suffer undue losses to the entities regulated by it.

The regulation of the cryptocurrency gets a no start when the most pressing argument by certain groups is that the currency lacks no central issuer and guarantee jurisdiction. People, however, shrug off the argument, if the data is to be believed. According to the number presented in the parliament, those using cryptocurrency grew from 30,000 in 2013 to five million in 2021. The number is huge. This is happening despite the law-enforcers arresting anyone who is believed to be mining cryptocurrency and trading. Recently, the court ordered the law-enforcers not to arrest the users or miners of virtual currency. The number is increasing and will increase multiple times, for cryptocurrency offers an easy and convenient way for international investment, operational, and money transfer purposes. In the age of the global village, when cross border transactions are becoming a new normal, the people are turning to cryptocurrency because of its cheap charges and offer of safe and real-time money transfers.

We are living in a time of denial and contradictions. On the one hand, the central bank is not ready to regulate the mined currency and the Security Exchange Company Pakistan does not register any firm aiming at trading in the currency. On the other hand, the Khyber Pakhtunkhwa has allowed mining and investment in cryptocurrency. Side by side, the NED University of Engineering and Technology has introduced Pakistan’s first PIVX coin, which is listed on exchanges. The government and the central government cannot sit on the future of the new currency forever, and they will have to step forward with regulation laws.

The only valid concern the government puts up as a barrier to legalizing cryptocurrency is the increased chances of money laundering. The Financial Action Task Force (FATF) has lately been hounding Pakistan for its weak monetary laws to stem the chances of money laundering. The government and FATF have long been in a nerve battle for over three years as the group has put Pakistan on its grey list of countries it monitors for failing to check terror financing and money laundering. As the government continues to address FATF concerns, there will be a way forward for legalizing cryptocurrency at the end of the day. The government must take hurried steps to open up a new avenue for a new generation. We hear that State Bank of Pakistan’s maverick and forward looking governor, Reza Baqir, has said the authority may come up with a central bank digital currency. He said this in April and so far, there has been no progress on it despite the passage of five months.

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