Preface
Is Cryptocurrency legal in Pakistan; It is still not legal in Pakistan; before April 2018, crypto users were trading and mining freely in Pakistan, and there was no restriction from the government. But in April 2018, The State Bank of Pakistan (SBP) notified all banks and financial institutions, and they were instructed to stop all the services they provided to facilitate cryptocurrency transactions, such as debit and credit card transactions. The Government of Pakistan claims that it took this action because it believes it can stop money laundering and illegal activities through cryptocurrencies.
Despite this fact, crypto adoption, trading, and mining in Pakistan have increased compared to the past. Okx, Binance, and Kucoin are doing their operations freely in Pakistan, and some Pakistan-based cryptocurrency exchanges such as B-love network, Octafx, and Jazz network have also been established and operated without any hesitation.
FIA Investigations vs Sindh High Court Petition
After the SBP’s announcement, FIA (Federal Investigation Agency) started a crackdown against Pakistan’s crypto minors and traders. A crypto influencer, the Head of “Technology Movement Pakistan,” Mr. Waqar Zaka, files a petition against the SBP’s circular in the Sindh High Court. Almost a year after this petition, Sindh High Court Judge Amjad Sehto passed an order in the context of a petition filed against the ban on digital currencies in Pakistan.
The court directed FIA authorities not to harass the crypto users and don’t take any action against them. Still, FIA authorities defend its illegal activities by citing the State Bank circular in the Sindh High Court. According to the petitioner, FIA is taking illegal actions against crypto users and harassing them. And the console of the petitioner said that the SBP’s circular has no such instruction to FIA; it is only for Banks to stop the transaction through bank cards like debit or credit.
During the Sindh High Court proceeding, Justice Ahmed Sehto was surprised that the FIA prevents crypto users from trading or mining. At the same time, the State Bank of Pakistan had no instruction at the notice to Federal Investigation Agency. An SBP lawyer was presented at the same hearing; he also confirmed that there is no such instruction to FIA, nor is Cryptocurrency banned in Pakistan yet, which is why FIA’s control over the case was compromised.
Raza Baqir, head of the country’s central bank, said in April-2021, authorities are keeping a close eye on the issue of buying and selling cryptocurrencies to help bring crypto transactions into the regulatory framework. In 2021, Justice Muhammad Karim Khan Agha heard the case of banning Cryptocurrency, and in this hearing, FIA’s lawyer, SBP’s representative, and petitioner were also present.
The Sindh High Court summoned the Exchange Commission of Pakistan (SECP) representatives, the Ministry of Law, and IT. The High Court directed all the stakeholders on this appearance that all the legal procedures to regulate cryptocurrencies should be clarified within three months. But unfortunately, the case is still ongoing, and the legislation regarding Cryptocurrency still needs to be made clear.
Lahore High Court Case – Is Cryptocurrency legal in Pakistan?
Lawyers for the Federal Investigation Agency, the Security Exchange Counsel of Pakistan, The State Bank of Pakistan, and the petitioner appeared in Lahore High Court concerning the case of the ban on cryptocurrencies in April-2021. Lahore High Court wanted legal assistance from institutions on this banning issue. After the meeting, the judge was directed to submit the legal points related to the currency to the court to clarify its legality. So, this case is also still pending.
Khyber Pakhtunkhwa Assembly’s Resolution of Digital Currencies
On the other hand, provinces of Pakistan are divided on the legislation issue of Cryptocurrency. Some parliament members think this decentralized technology is the future of the new financial world, and Pakistan must adopt it. In Dec-2020, Khyber Pakhtunkhwa Provincial Assembly passed a resolution regarding cryptocurrency trading and mining legalization; Dr. Sumera Shams, a KP Assembly member, presented that resolution. Later, Zia Ullah Bangash: “Chief Minister’s advisor on Science and Technology,” tweeted this passed resolution.
This resolution emphasized that Pakistan should adopt the changing situation of digital technology globally. This resolution made the case quite clear for crypto users. This resolution of the KP Government built a trust factor among traders, investors, and minors of digital currencies. Due to this resolution, many people started crypto mining in Khyber Pakhtunkhwa, particularly in the Swat region, and currently, KP is the digital currency hub of Pakistan. Khyber Pakhtunkhwa government plans to make this province the largest cryptocurrency hub in Asia.
Still, there needs to be support from the Federal Government of Pakistan to the provinces, as we know that there are cases of crypto going on in Sindh: Karachi, as well as Punjab: Lahore.
Crypto ban in Pakistan
On 17 May-23, new news created a stir in the market regarding Cryptocurrency. Ayesha Ghos Pasha, the minister of state for finance, declared that cryptocurrencies would not be permitted in Pakistan for crypto users. She made this announcement during the Senate Standing Committee on Finance hearing, which Chairman Saleem Mandviwala headed over. The FATF has also imposed its conditions and decided to shut down all services from the internet to stop Bitcoin or other cryptocurrencies from being used by people either trading or mining.
Cryptocurrency is still out of Tax-Net in Pakistan. The Minister of State said that government will add new industries to the Tax-Net during the upcoming fiscal year 2023–2024. Government has no income in terms of taxes from cryptocurrencies; FBR aims to raise the direct tax rate in the forthcoming budget, so they want to ban every industry which is not in Pakistan’s tax net. At the policy level, assignments are being done in this area, and efforts are being made to reduce the tax burden on the ordinary person. The country needs to increase its tax base due to the escalating financial loss.
During a briefing before the meeting, State Bank representatives informed the senate members that the cryptocurrency market had shrunk from $2.8 trillion to $1.2 trillion. And he also told the members that the FIA is taking legal action against Pakistani cryptocurrency users. In the senate session, another person Mr. Sohail Jawad: “State Bank Director,” was also presented, and he told the members there are more than 16,000 different kinds of Cryptocurrency, and he emphasized that it is hazardous currency, and Pakistan will never accept it as the payment method.
Crypto experts in Pakistan criticized his crypto knowledge because, in the market, there are more than 24,000 coins and tokens. Mr. Sohail Jawad said, “The crypto is a hazard,” but he didn’t explain the hazard; crypto experts think it is just a political statement.
Beware of phishing scams
When governments or states cannot decide in the right direction regarding cryptocurrency regulations and need to educate the people properly, many scams and hackers become active in the crypto market to rob innocent people. If you are new to Cryptocurrency, first of all, you should study the states’ or governments’ rules and regulations and the exchanges they work in your country accordingly.
Keep your email or password strong to avoid scams, and do not share with anyone. These scams usually happen when users want to participate in free earning apps and share their credentials’ details. If you will earn some free cryptos, study the project, study the rules and regulations, explore the whitepaper, and most importantly, don’t share your login details.
Summary
Is Cryptocurrency legal in Pakistan; Crypto users in Pakistan have yet to acknowledge digital currency because the market is hazardous due to unexpected price swings, and they cannot understand the exact science of the financial crypto market. Cryptocurrency is legal in the Khyber Pakhtunkhwa province of Pakistan, and users work there without any hindrance. But in Sindh and Punjab, FIA is holding back, and consumers are afraid to invest in crypto.
And there is a situation of uncertainty in Pakistan, as the recent announcement regarding cryptocurrency in the Senate has worsened the situation. During the coronavirus pandemic, the interest in cryptocurrencies has rapidly increased. Approximately ten million people were doing trading or mining, which could be affected by the ban on crypto, but if the Government of Pakistan imposes the ban on crypto users, they have a way; they can use VPN to access the crypto assets.
In Pakistan, cryptocurrency investing is growing extensively, and people also accept crypto as a payment method on their own. To begin your cryptocurrency journey, it’s crucial to do extensive research pick a reliable exchange such as Binance, OKX, Kucoin and, Coinbase, etc., and coin pairs for investing. If users research in the right direction, they can earn potential profit.
FAQs:
1. Is buying crypto illegal in Pakistan?
The government of Pakistan has taken a principled decision to ban cryptocurrencies. The economic situation of Pakistan has been unstable for a long time, due to which the value of the Pakistani rupee has decreased significantly. As recently as May 2023, the government’s strict stance regarding Cryptocurrency has been revealed in the Finance Committee of Senate. At the meeting, Finance Minister of State Ayesha Ghospasha said cryptocurrencies “will never be legalized in Pakistan.”
2. Is crypto haram in Islam?
There are many conflicting opinions regarding halal and haram in cryptocurrencies. According to some Islamic scholars, spot trading is considered halal and margin, options, and futures trading are considered haram. Over time, many sects have existed in Islam, each with its own “Fatwa”. Crypto is a modern financial system, and this is our complete article about Crypto Halal and Haram; you can read this topic in detail by clicking on it.
3. Who is the crypto guru of Pakistan?
Mr. Waqar Zaka and Mr. Muqdas Butt are Pakistan’s most popular crypto influencers; both continue to make people aware of crypto through their social media platforms. Mr. Waqar Zaka runs a premium Facebook page. Mr. Waqar Zaka is the head of the “Technology Movement of Pakistan” and the petitioner of the crypto case in Sindh. He also runs a Facebook page with a monthly fee of Rs. 1500. This page is constantly updated about crypto tutorials, blockchain tutorials, online trading sessions, mining methods, and cryptos latest news. Mr. Muqdas Butt educates people through its Youtube channel, which has complete and comprehensive tutorials for newbies. On this channel, the analysis of all the latest crypto news is presented worldwide.
4. Why has Pakistan banned crypto?
In May 2023, the Pakistani government decided to ban cryptocurrency services and vowed that cryptocurrencies would never be legalized in Pakistan. The government of Pakistan believes that crypto is used for money laundering and illegal activities, and is not getting any tax from cryptocurrency which is why the government wants to ban it so that the credibility of the falling Pakistani rupee can be strengthened.