The price of cryptocurrency is very high in Pakistan! As more people use it, the government is learning that it needs to be regulated. Pakistan, which has about 250 million people, is one of the new areas in Southeast Asia. Most people in the country live below the poverty line, but they are hoping that better times are on the way.
At the same time, more people in Pakistan are using Bitcoin, even though an approved exchange has yet to be established there. Since many people in Pakistan use cryptocurrencies, the country needs to have rules about them.
In this guide from TechMag, we will discover the crypto regulations in Pakistan in 2024.
Also Read: Cryptocurrency Trading Strategies in Pakistan
Pakistan’s Adoption of Cryptocurrency
Even though there aren’t any rules in place yet, the use of cryptocurrencies like Bitcoin has grown a lot in Pakistan. People in Pakistan use P2P services like Binance, Paxful, and other over-the-counter (OTC) ways to trade.
Pakistan’s Securities and Exchange Commission (SECP) published a paper in 2020 discussing some possible ways to regulate cryptocurrency in the country. The State Bank of Pakistan issued a public notice saying that cryptocurrencies are not legal tender and that the SBP has not approved or licensed anyone or anything to issue or deal in virtual currencies.
- Despite regulatory challenges, Pakistan ranked sixth in the global crypto adoption index, and its crypto market is estimated at $18–25 billion.
- The fact that the inflation rate is over 25% and has been getting worse over the past few years can also help to explain why Bitcoin adoption is increasing.
- Cryptocurrencies can be mainstreamed in Pakistan. Southeast Asia’s emerging market!
- Crypto enthusiasts in Pakistan are willingly accepting the crypto revolution, as evidenced by communities like “Bitcoin Pakistan.”.
Is crypto legal in Pakistan?
- Bitcoin, for example, is not officially regulated in Pakistan, but it is not illegal either.
- As of January 16, 2021, the State Bank of Pakistan has not given anyone or any group permission to buy, sell, trade, or invest in virtual currencies, coins, and tokens. The Cyber Crime Wing of the Federal Investigation Agency (FIA) has arrested a number of people for mining Bitcoin and other cryptocurrency. The people were caught with money laundering charges.
- Even though there are many disagreements about cryptocurrencies, well-known Pakistani writers and social media stars trade bitcoins and regularly post content in support of regulating them.
- Khyber Pakhtunkhwa became the first province in Pakistan to legalize cryptocurrency in December 2020.
- Pakistan said in May 2023 that it would not allow any activities linked to crypto or blockchain. It wanted to stop illegal digital currency activities and follow the rules set by the Financial Action Task Force (FATF). Part of the reason for this was worries about funding terrorists and laundering money.
- Pakistan’s government announced in May 2023 that crypto will never be legal. The SBP first banned cryptocurrency in January 2022.
- According to reports, due to restrictions set by the international money-laundering watchdog FATF, Pakistan cannot legalize cryptocurrency.
Legal Status Overview
As we all know, regulatory agencies in Pakistan do not allow actions that use blockchain or are related to crypto. A few crypto-related actions were criticized in the most recent ban. Let us look at how the law treats the following cryptographic basics:
Bitcoin Banned/ Illegal
NFTs Illegal
Mining Illegal
Trading Illegal
DeFi Allowed
Taxation
In Pakistan, there is no tax on keeping or trading crypto assets right now! Several ideas have been put forward, though.
A 5% tax would be charged on cashing out crypto held in foreign exchange accounts and a 10% tax on cashing out crypto held in Roshan digital accounts. A 5% tax would be charged for exchanging crypto for Pakistani rupees. Based on Section 37A of the Income Tax Ordinance, 2001, a 15% tax is being suggested on crypto trading profits. Crypto gains should be described as “securities” for this purpose.
Also Read: What is Bitcoin and Where to Buy Cryptocurrency?
Conclusion
A new study on crypto adoption shows that the number of people using Bitcoin in Pakistan has grown significantly, even though no rules are in place yet.
In Pakistan, people who want to buy Bitcoin use peer-to-peer services like Binance and other over-the-counter (OTC) trading methods. The rate at which Bitcoin is being used in emerging economies in the developing world is one of the highest in the world.
Sponsored by
