Pakistan’s central bank SBP can’t ban the cryptocurrencies and their trading. SBP announced the illegality of crypto assets at the same time Indian Reserve Bank. Indian position is still confusing as there is no explicit ban but crypto assets are not legal tender.
The manner in which the ban was executed was almost laughable. Indian authorities gave the platforms and banks three months to comply with the order. But the Pakistani SBP went all in one. They shut down all the crypto operations the very next day.
It led to heavy losses to certain platforms such as Urdubit. Urdubit is Pakistan’s first bitcoin exchange platform. But in some cases, it has opposite effects. The first Pakistani cryptocurrency called Pakcoin whose prices dipped after the announcement is on the rise.
It is estimated that the ban actually exposed a lot of people to the crypto market who had no prior knowledge of it. This led to the entry of new costumes and the prices are upswing now. It is now 60% up compared to its position after the ban.
Pakistan’s Ministry of Information Technology and Telecommunications is readying the proposal to bring legislation to ban all forms of crypto trading. But this reveals the apparatchik mindset of the bureaucratic governance typical of South Asian governments.
As far as the global trading in virtual currencies is happening, it will be impossible for one state to impose any significant ban. Only a Luddite would fantasize about this phenomenon.
The strategy of states is targeting the online crypto exchange platforms and direct banks not to enter the crypto market. But there are alternative ways to trade on the global platforms and the majority of them don’t go through banks.
According to one report, about 80-85% of the stock traders in Pakistan have already applied for their money in virtual currencies. The analysis is that it may be possible that the worst hit by the perpetuation of this trading will be stock exchanges, not financial systems.