The crypto ban in Pakistan is turning out to be a little bit disappointing. Most of the financial firms as well as commercial banks have been barred from getting involved in the crypto trading activities. Indulging in such activities has been impacting the local exchanges in a negative way according to a person following on the most recent developments.
Pakistanis defy set regulations
They might be difficult times for the individual traders, but most of them are considering the alternative ways in which they will be able to proceed and either acquire or sell cryptocurrencies. They are ready to defy the various prohibitions and warnings.
Pakistan has been dealing in cryptocurrencies for over a long period of time. Its experience tells quite much regarding how most of the financial authorities can turn out to be ineffective when it comes to filling a legal vacuum with prohibitive administrative measures.
It is a common phenomenon that central banks many at times forget that they are neither governments nor parliaments. They end up committing the mistake of thinking that with their regulatory overreach they are well placed to substitute the normal legal process which is not the case.
The current state of affairs
The recent move by the State Bank of Pakistan to place a ban on the crypto-related activities is sufficient proof for this particular observation. It was in April that the SBP issued a circular warning against the acts of businesses getting involved in the virtual currencies. It was a short while back that the Reserve Bank of India took a similar step. It has been its regional rival for over a long period of time.
Reports indicate that most of their Indian colleagues gave the traders and banks a timeframe of three months within which they were expected to have complied. The Pakistani central bankers took a different move when they decided to impose the ban with immediate effect.
SBP stated that a huge deal of virtual token and currencies were not under the legal tender category. It added that so far it hadn’t authorized any entity or individual to either purchase or issue out the coins in the country.
The CEO of Pakistan’s first bitcoin trade Urdubit, Danyal Manzar, asserted that there was no need to do things in haste. According to him, it was important to provide ample time before moving ahead to execute any shutdown move.