The government of Pakistan is taking the following steps to regulate cryptocurrencies:
### 1. Establishment of Committees and Policy Making
- In 2021, the federal government formed a committee to study cryptocurrencies and propose regulations. Its objective was to review global models and prepare an appropriate framework for Pakistan.
- In 2023, further progress was made in this regard, considering the legal status of crypto, taxation, and security aspects.
### 2. Alignment with FATF Guidance Principles
- Pakistan is implementing the recommendations of FATF (Financial Action Task Force) to monitor financial transactions, which include KYC (Know Your Customer) and AML/CFT (Anti-Money Laundering/Combating Financing of Terrorism) measures for crypto exchanges.
### 3. Preparation of Central Bank Digital Currency (CBDC)
- The State Bank of Pakistan (SBP) is researching the possibility of a digital rupee (e-Rupee), which would be a government-controlled digital currency. This will help limit the use of unregulated cryptocurrencies.
### 4. Taxation Policies
- The Federal Board of Revenue (FBR) has initiated steps to bring crypto assets under the tax net. Tax may be imposed on investment returns and transactions.
### 5. Public Awareness Campaigns
- SBP and SECP (Securities and Exchange Commission of Pakistan) have conducted campaigns to inform the public about the risks of cryptocurrencies (such as price volatility and fraud).
### 6. Licensing and Supervision of Exchanges
- The government may require crypto exchanges to be registered and comply with strict AML/CFT standards. Action may be taken against unauthorized platforms.
### 7. International Cooperation
- In consultation with institutions like the IMF and World Bank, Pakistan is trying to develop a modern regulatory framework.
### 8. Determining Legal Status
- Cryptocurrencies currently do not have the status of "legal tender" in Pakistan, but the government is not making them completely illegal either. Their status can be clarified through new laws.
### 9. Prevention of Illegal Activities
- Monitoring of crypto transactions is being increased to prevent financing of terrorism and money laundering.
### 10. Possible Restrictions
- The possibility of a ban on unregulated cryptocurrencies (such as Bitcoin) still exists, especially after the introduction of CBDC.
### Recent Developments (2023-2024):
- According to some reports, Pakistan is prioritizing CBDC while also considering a ban on foreign cryptocurrencies.
- SBP has not allowed banks to conduct transactions related to crypto, but this policy may be relaxed after regulations.
### Result:
Pakistan is moving towards regulating cryptocurrencies instead of completely eliminating them, in order to modernize the financial sector and control illegal activities.