ISLAMABAD: Pakistan has reversed its stance on cryptocurrencies, moving from a complete ban to legalization and regulation in just months, with around 70 major global exchanges now seeking licenses to enter the country's emerging digital-asset market, the chairman of Pakistan's Virtual Asset Regulatory Authority said Thursday.
Bilal Bin Saqib, speaking at a press briefing, said Pakistan is also considering the tokenization of government debt and Roshan Digital Accounts as part of its future digital-asset initiatives.
He said the country's mufti-e-azam, or grand mufti, has been taken into confidence over digital assets and that guidance is being sought on transactions involving them. A Shariah advisory board is being formed to deal with matters related to digital and virtual assets and will provide guidance on such transactions, he added.
Saqib noted that India has imposed a 30% tax on crypto transactions. He said Pakistan has an estimated customer base of around 40 million, with investments by Pakistanis in the sector reaching approximately $250 billion.
He said the prime minister has provided him with all-out support, adding that he was involved in the digital currency business and has established business and professional ties with the Trump administration.
Saqib said the cost of sending remittances of $41 billion could be brought down from 6.3% to 1%, and that PVARA and the State Bank of Pakistan are devising a mechanism to save $416 million by removing several layers and connecting machines that would ensure instant access to receiving money within minutes.
He said a sandbox would need to be put in place for better visibility, and then a stablecoin would be used to undertake transactions. Overseas Pakistanis would remit their money in the same currency of their respective country of residence, but it would then be converted into a stablecoin and instantly received by the recipient.
He acknowledged that remaining fully compliant with anti-money laundering and counter-terrorist financing standards under the Financial Action Task Force is the biggest challenge.
An official from the Financial Monitoring Unit said Suspicious Transaction Reports would be issued and sent to the FMU for further action. However, the official acknowledged that having full visibility of customers would be somewhat difficult, but that could be overcome by going deeper.
Asked about the possibility of a mufti issuing a fatwa against crypto or digital currency, Saqib replied that he had presented his viewpoint and expected a favorable statement soon.
He said PVARA is in close contact with international jurisdictions, as cooperation among different countries will play a critical role in the smooth functioning of digital assets in the future. He said Pakistan is negotiating a Memorandum of Understanding with Kazakhstan and Kyrgyzstan because Pakistan has moved faster than mature jurisdictions.
Saqib said around 70 applications have been received from major global exchanges seeking licenses to operate in Pakistan. He noted that Dubai took 17 months, Singapore 20 months and the U.K. 46 months, but Pakistan took almost six months to make PVARA fully functional after passing legislation through Parliament.
