The central bank of Pakistan has told financial service providers and banks that it won’t be supporting virtual currency transactions. In a statement on its website, the State Bank of Pakistan (SBP) suggested the general public that it controls both international and domestic payment as well as money transfer services.
Prosecution Against Transferring Funds
According to this cryptocurrency ban news, the State Bank of Pakistan will take action against those who use virtual currencies for transferring funds outside Pakistan. If they found anyone using virtual currencies, tokens or coins for transferring money outside Pakistan, he/she will be subject to prosecution according to applicable laws. The State Bank of Pakistan also asked microfinance and commercial banks, as well as payment service providers/operators to restrict those account holders, who are looking forward to carry out transactions in the form cryptocurrencies and ICO tokens.
The State Bank of Pakistan also noted that it doesn’t recognize cryptocurrencies as legitimate tender and hasn’t sanctioned or licensed anyone for the sale-purchase, exchange-investment or even issuance of any tokens or currencies.
The State Bank of Pakistan took the action of the following risks:
- The closure and fiasco of virtual currency exchanges as well as businesses for any purpose, like action by law enforcement agencies.
- The number of security negotiations of virtual currency exchanges and wallets all-inclusive, in which huge amount of funds was lost.
- Virtual currencies are extremely erratic, volatile and the prices are mostly based on assumptions.
Furthermore, fraudsters have started to offer “pyramid style investment schemes” as well and have promised high returns to the general public of Pakistan. The State Bank of Pakistan has also warned that such schemes similar to cryptocurrency Ponzi schemes, can cause some hefty losses to the general public.
The Reserve Bank of India (RBI) stated that all controlled entities that already offer virtual currency services are required to cut off all ties within three-months. These services include:
- Maintaining accounts
- Giving loans against virtual tokens
- Accepting the loans as collateral
- Opening accounts of exchanges that manage them and transfer funds in accounts including the sale and purchase of virtual currencies.
The Reserve Bank Of India (RBI) believed that blockchain technology has a lot of positive applications however, it contends that cryptocurrencies increase several concerns related to the:
- Protection of customers
- Market integrity
Preventing financial crimes