A question commonly asked : Is cryptocurrency Legal or illegal in Pakistan ?
Cryptocurrency is unregulated, which means that no laws have been formed on cryptocurrency which neither makes it legal or illegal.
Anything which is NOT illegal or lacks any laws falls under the category of legal.
Thus, Yes, Cryptocurrency is legal in Pakistan, It is just not regulated in the country that’s why people have doubts, State Bank of Pakistan has not declared it ILLEGAL. There are no laws in the country which state that Crypto is Illegal.
What about State Bank of Pakistan Notice ?
SBP issued a public notice in 2018 which you can read here , it states :
General Public is advised that Virtual Currencies/Coins/Tokens (like Bitcoin, Litecoin, Pakcoin, OneCoin, DasCoin, Pay Diamond etc.) are neither recognized as a Legal Tender nor has SBP authorized or licensed any individual or entity for the issuance, sale, purchase, exchange or investment in any such Virtual Currencies/Coins/Tokens in Pakistan.
General Public (we) have been advised to be cautious while dealing with crypto as there is no ‘legal structure’ , which implies if something happens (crypto related scams etc) the state will not be able to help or facilitate in that, nor the state will approach the exchanges to work out a solution.
Further, Banks/ DFIs/Microfinance Banks and Payment System Operators (PSOs)/ Payment Service Providers (PSPs) have been advised not to facilitate their customers/account holders to transact in Virtual Currencies/ Initial Coin Offerings (ICOs) /Tokens vide BPRD’s Circular No. 03 of 2018.
The notice further tell the banks not to facilitate crypto transactions, which means that we can not use our cards or make direct payments to an exchange to buy crypto or the exchange send money directly to our banks accounts to sell crypto.
General Public is advised that domestic and international payment and money transfer services in Pakistan are regulated by SBP under the applicable laws. In this regard, no entity is currently licensed or authorized by SBP to offer money remittance services and products in Pakistan using Virtual Currencies/ Coins/Tokens. Persons using Virtual Currencies/ Coins/Tokens for the purpose of transferring value outside Pakistan are subject to prosecution as per the applicable laws.
This part of the notice is important as it highlights that transfering funds while making use of crypto is illegal as funds should be moved out of a country through legal banking channels and there are strict laws already in place to control move of value outside of Pakistan.
In view of the above, the General Public in their own interest is advised to be cautious of and refrain from indulging in activities relating to mining, trading, exchanging, transferring value, promoting and investing of Virtual Currencies/Coins/Tokens to avoid any potential financial loss and legal implications.
For this part to actually have ‘legal implications’ crypto assets will need to be ‘regulated’ and then declared as ‘illegal’. The absence of any regulations can not make something illegal.
Waqar Zaka Court Case and Verdict
Read audio conversation of Waqar Zaka with Niazai Khan. Waqar Zaka explains after his court hearing the governor SBP eventually said “We have not declared cryptocurrency as illegal” because for that to happen they will need to regulate crypto.
You can listen/read about the discussion here.
How Exchanges are Working if Crypto is Illegal
As I have said it many a times, if crypto is illegal in Pakistan how crypto exchanges are not blocked by Pakistan Telecommunication Authority(PTA) in Pakistan?. The reason is simple, PTA has no authority to block exchanges because there is no law against which they may ban crypto exchanges at the moment.
Why P2P Merchants are operating their Business
Again, P2P merchants are openly running their accounts publicly listing their bank accounts because it isn’t illegal , however if you receive FIA notice after a p2p deal it happens only because the merchant account is flagged and is most likely involved in money laundering, which is definitely illegal. Getting your bank account banned after a p2p deal is due to ongoing bank chain dispute scam only.
For more discussion on the matter check out Legal Issues guide in Cryptocurrency Pakistan Facebook Group
