The government of Pakistan has three months to come up with regulations for the digital currency industry, a regional high court has ruled. In its ruling, the court ordered the central bank and the securities regulator to work with other stakeholders on the regulation for the industry.
Pakistan is one of many countries in South Asia that have seen a sharp rise in digital currency adoption in recent years. According to website traffic monitor Similarweb, digital currency trading apps like Binomo have seen more downloads on app stores than those of the country’s largest banks.
Despite the uptake, Pakistan has yet to issue clear regulations for the industry.
The Sindh High Court is seeking to bring this regulatory ambiguity to an end. According to local reports, the court, which is the highest in the southeastern province of Sindh, gave the government three months to work on the digital currency regulations.
The court, in particular, directed the Securities and Exchanges Commission of Pakistan (SECP) and the State Bank of Pakistan (SBP) to join hands with the Ministry of Law and Justice, the Ministry of Information Technology, and other stakeholders to formulate regulations for the nascent industry.
For Pakistan, combating money laundering and terrorism financing through digital currencies is one of the biggest considerations. The country has been on the grey list of the Financial Action Task Force (FATF) for having inadequate checks in place to curb these vices.
Pakistan continues to see a high interest in Bitcoin, with local outlets reporting that social media groups dedicated to digital currencies have continued to see several new members daily. It ranked third in the Chainalysis Global Crypto Adoption Index 2021 after Vietnam and India respectively.
The government has also been slowly catching up and this year, it set up a committee to study digital currency regulations, sourcing from the FATF, intelligence agencies, and federal ministries. However, no concrete move has been made from recommendations made by the committee.
The country’s educational institutions are also catching up to the new wave. Earlier this year, Lahore University of Management Sciences received a $4.1 million grant to study and teach about digital currencies and blockchain technology.
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