by The Governor of the State Bank of Pakistan (SBP) has ruled out the possibility of accepting or approving cryptocurrencies as a legal tender in Pakistan. The bank boss said this because he believes that digital currencies and virtual assets can’t create development or financial innovation.
Governor Reza Baqir of the State Bank of Pakistan insisted on his belief that cryptocurrencies lack the requisite use case to promote vital financial goals of the country’s apex bank, including financial innovation and inclusion. The governor made the statement while addressing the audience at the 13th Karachi Literature Festival. He added that Pakistan’s economy is faced with many challenges like financial accessibility but does not see how approving cryptocurrency as a legal tender can help the banking regulator.
The Only Advantage of Cryptocurrencies
The bank chief noted that the only important use case of cryptocurrencies exchanges. In his words, Baqir said that if crypto is evaluated now, considering what it currently offers, we will prove that its sole use is for exchanges; he insisted that the only reason people want Pakistan to adopt bitcoin was to enable them to transfer money abroad.
He went further to say that there are risks and benefits attached to any new development or innovation, but that policymakers have to evaluate the balance, determine the ratio of its risks and benefits and then formulate a policy framework regarding the adoption of digital currencies as it relates to Pakistan.
Crypto is a Tool Used for Committing Financial Crimes
The SBP boss expressed concerns over the transparency of digital currencies. He said that cryptocurrencies are promoting crime in most parts of the world because the issue of visibility cripples its credibility. People are involved with crypto only as a tool to commit financial crimes such as money laundering and crimes against humanity like human trafficking and rights violations.
Furthermore, Baqir explained that a country’s apex bank is saddled with the responsibility of promoting financial transparency, inclusion and visibility. They also help prevent economic actors from committing crimes in the financial space. Nevertheless, following a recent ugly development that involves internet fraudsters using Pakistan’s financial space to launder money and commit other crimes, thereby giving the country a bad name, the apex bank wet down on any possibility of adopting cryptocurrencies.
On the final decision of the SBP, Baqir said the apex bank has resolved that the risk of adopting cryptocurrencies is far more extensive than the associated benefits. He also claimed that the features of digital currencies are not in tandem with the objectives of SPB.
That notwithstanding, Pakistan has joined the increasing list of central banks of various countries banning cryptocurrency activities and participation. India, China and Malaysia have also banned cryptocurrency in their countries.
According to the deputy finance minister ll of Malaysia, Yamani Hafez Musa, he said cryptocurrencies do not have the characteristics of real money and, as such, cannot be utilized as a means of payment. His Indian counterpart stated categorically that cryptocurrencies are not accepted in India, not even as a legal tender.
