Pakistan’s Sindh High Court Gives 3 Months to Government for Cryptocurrency Regulation

Pakistan's Sindh High Court has directed Prime Minister Imran Khan's government to speed up the regulation of cryptocurrencies. A three-month deadline has been given to Pakistan's ruling government for submitting the proposed regulatory rules. In a bid to fast-track the momentum of this task, a new committee has been formed headed by Kamran Ali Afzal, the federal finance secretary of Pakistan. The court has advised the government to invite suggestions from all stakeholders as well as government officials and ministries.

The court's instruction to the Pakistani government has come after a two-judge hearing on a petition that challenged the ban on cryptocurrencies. Along with the petitioners, details of whom remain unknown, officials from the country's Federal Investigation Agency (FIA) and State Bank of Pakistan (SBP) also attended the hearing.

Reza Baqir, Pakistan's central bank, had said in April that the authorities were studying ways to regulate cryptocurrencies and their capability of facilitating off-the-book transactions within a legal framework.

These seemingly pro-crypto moves being initiated by the Pakistani authorities come at a time the crypto-culture is creating strides in the country.

In the 12 months up to June 2021, the cryptocurrency market grew by 706 percent and reached a value of $572.5 billion (roughly Rs. 42,62,844 crore) in regions of Central and Southern Asia as well as in Oceania (CSAO), a report by research firm Chainalysis had claimed recently.

In Asia, Pakistan ranks third after Vietnam and India in terms of widespread crypto adoption. In addition, Pakistan also ranks 15th in the world for crypto adoption as per another report.

The Chainalysis report estimated that Pakistan received an excess of $1.5 billion (roughly Rs. 11,230 crore) in crypto-cash last year.

The discussions around the expanding crypto space have also begun to get louder in Pakistan. For instance, in a recent National Assembly session, Pakistan's politicians cited India's example in letting the crypto space breathe and churn profits in return.

“Over 56 million people have been using cryptocurrencies in 2021. Our neighbour India has created four crypto exchanges, out of which, the native token of WazirX is being traded globally with a market share of over $172 million (roughly Rs. 1,287 crore),” a Pakistani politician recently told the Assembly in Hindi.

Along with Pakistan, India is also processing ways to regulate decentralised currencies.

India awaits the result of an official draft cryptocurrency bill that will be presented before the Parliament in its upcoming Winter Session.

In September, a new committee was formed under India's finance ministry to find out if income made by crypto-trading could be taxed.

Amid the growing crypto culture, Indian finance minister Nirmala Sitharaman has been overlooking the draft formulation of the cryptocurrency bill.

Meanwhile, the Reserve Bank of India (RBI) is also working on launching its official digital currency as a regulated “central bank digital currency (CBDC)” by the end of 2021.