Ex-Pakistani Government Moves to Amend the SBP ACT for Legalizing Cryptocurrency
The Pakistani government has drafted significant amendments in the State Bank of Pakistan-SBP Act to make cryptocurrency legitimate and give a push to the country’s digital financial structure. After getting approval from the federal cabinet, this may place Pakistan in those growing lists of countries that have regulated digital currencies.
Legitimization of Digital Currency: A First for Pakistan
The amendments now bring “digital currency” into the SBP Act, thus authorizing the central bank to issue digital assets and their regulation as legal tender. The transition can give full powers to the State Bank of Pakistan regarding both physical and digital financial assets to accomplish its regulatory mandate and have digital payments securely integrated into the national economy.
Expanding Opportunities for Dual Nationals in SBP Leadership
Apart from the legalization of cryptocurrency, the amendments also propose the removal of prohibition against dual nationals occupying key posts in the SBP as governor and deputy governors. This would be a policy reversal of rules promulgated by it in 2022 and may now bring in more diversified and competent talent for the leadership of the central bank.
Improvement in Compliance and Governance
For the purpose of strict regulation, amendments in the Bill also provide for fines against unlawful issuance of digital currencies, which may extend to a penalty equivalent to double the amount of illegally issued digital assets. Also, the enhanced role of the board of SBP can approve more financial reports on its own and expedite the internal decision-making process.
Legal and Regulatory Issues
Complying with an order from the Sindh High Court to establish a framework of law to regulate cryptocurrency, the Government of Pakistan set up a committee to examine the legality of crypto under the national law. This development came after a petition was filed in opposition to the anti-crypto stance of the SBP in 2018, which advised against activities related to crypto mining and trading.
The Digital Rupee and the Way Forward for Pakistan
The SBP is fast-tracking the development of its digital rupee en route to its digital transformation, launch tentatively expected in 2025. In comments, SBP Governor Jameel Ahmad said high inflation has pushed many citizens toward alternative currencies, with a CBDC playing a key role going forward in monetary stability.
