A two year old decision about the ban on Bitcoin in Pakistan has taken a new turn. The Sindh High Court (SHC) has had doubts about the earlier ruling. The State Bank of Pakistan imposed a ban on cryptocurrencies in 2018, but Judge Muhammad Iqbal Kalhoro seems to come back to that now.
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Bitcoin in Pakistan
The highest court in the Pakistani province of Sindh has asked the Federal Investigation Agency (FIA) and the central bank of the country for a comprehensive report. This should clarify the general ban on cryptocurrency in the country. This is shown in a news article by local media.
In 2018, Pakistan’s central bank issued a circular stating that all banking institutions, financial service providers and payment processors must stop using digital currency. They also had to stop offering their services to customers engaged in ‚crypto‘.
In addition, the SBP declared all types of digital currency illegal and noted that it is not legal tender. The SBP warned financial institutions to report every crypto-related transaction.
Despite this statement, Bitcoin is not gone in Pakistan. They use peer-to-peer platforms to bypass the banking world.
Influencer Waqar Zaka started a campaign to legalize crypt currency in Pakistan. And that seems to be successful!
Judge Muhammad Iqbal Kalhoro, who led the hearings against the ban, was open to Zaka’s story. He is ‚unhappy‘ with the earlier decision to ban cryptocurrency. He even emphasized that Pakistan is far behind in technology. The judge is now questioning a Pakistani ban, while Bitcoin is being used all over the world.
So there is hope again for the Pakistani crypto community after the hearing.
Parallels with India
This state of affairs is very similar to the way the Reserve Bank of India tried to impose a ban. The Indian central bank advised all financial institutions in the same way to stop the cryptomarket.
In May this year, the Central Bank of India (RBI) confirmed that there will be no ban for Bitcoin companies to use banking services. The Supreme Court ruled on 4 March that the regulator’s ‚paper ban‘ is unlawful.
Meanwhile, the Indian Ministry of Finance is trying to regulate a ban itself. Because where the central bank does not have the rights to do so, a cabinet can of course do so. They are now focusing on an older bill from 2019.
So for Pakistan there seems to be hope. An earlier ban from the State Bank, looking at the situation in India, seems illegal.