State Bank of Pakistan (SBP) Governor Reza Baqir during a panel discussion at the 13th Karachi Literature Festival on Sunday said that for Pakistan the use of cryptocurrencies has a much higher risk than benefit, according to a media report.
The use of Bitcoin is mainly seen in making speculations and to transfer money abroad, SBP cannot allow it for such activities.
In addition Reza Baqir said that financial inclusion and innovation are the main objectives of the central bank. Cryptocurrencies, although based on a useful technological framework, are not relevant in achieving the goals of the banking regulator.
Governor State Bank added that cryptocurrency is also being misused for the purpose of money laundering and other violations across the world. It is not possible for the regulator or a law enforcement agency to keep an eye on the transactions done while using cryptocurrencies.
According to the governor Pakistan is on the grey list of the Financial Action Task Force (FATF). The FATF is keeping a close eye on Pakistan’s financial system therefore we need to be extra careful and vigilant in our dealings. He added that cryptocurrency is not illegal in Pakistan but we have been asked by FATF to implement better regulations on the industry.
In the past Pakistan’s financial system has been misused for money laundering and terror financing.
“Presently SBP has concluded that for a country like Pakistan the risk of using cryptocurrencies is higher than its benefits, although the central bank will work on developing a better understanding of these currencies in the future.” said the governor.
He further said that countries like China, India and Russia have made similar decisions on the use of cryptocurrencies and there is a need to see how they develop in the future.