Without border, open -open, volatile and decentralized – the crypto is rapid and evolves in constant evolution. These are not only fashionable words; They define a technology that questions the very foundations of traditional financial systems.
The profile question is: how do you regulate something designed to resist control and challenge regulations while increasing faster than our ability to legislate around it?
For years, Pakistan has watched with distrust the revolution in global cryptography rushing – skeptical and silent. In 2018, the State Bank of Pakistan (SBP) issued a circular bank and forbidden to facilitate cryptographic transactions. But a ban is not regulations and silence is not a strategy. And the Pakistanis quickly detected the turmoil of something bigger. This class A Asset Class A, a guarantee, a guarantee, a currency – or something else?
Without legal clarity or roadmap, the cryptocurrency market in Pakistan has developed quietly in the shadows – not regulated, misunderstood and vulnerable to improper use. However, despite the void and legal risks, by 2021, the country had reached third place in the world during the adoption of cryptography, with around 15 to 20 million active users.
The government has recently taken important measures to formalize the cryptography sector with the creation of Pakistan Crypto Council (CCC). Directed by Bilal Bin Saqib and supported by key personalities such as the Minister of Finance and the Governor of the SBP, the CCP aims to integrate digital assets into the national financial system. The appointment of the founder of Binance, Changpeng Zhao, as a strategic advisor, also points out Pakistan’s intention to align himself with global cryptography standards. However, challenges remain. Financial literacy is uneven and institutional capacity extends. The regulators are now confronted with the double task of building a standard global framework while following the pace of a rapidly evolving industry.
Crypto regulations occupies a unique space, seated at the crossroads of several regulatory regimes, often overlapping. While blockchain-based applications evolve quickly and the new cases of use of cryptocurrencies emerge almost daily, each innovation introduces new legal uncertainties and risks.
For Pakistan, the challenge is even more pronounced. He must find a meticulous balance between the establishment of legal certainty and navigation on his own economic priorities and his institutional capacities. However, the urgency of passing this emerging sector under the aegis of a complete regulatory framework is undeniable. Pakistan must promote responsible innovation while protecting consumers in a digital economy without borders – or may be delayed in the global race.
The following political recommendations describe a progressive progressive and pragmatic path.
Phase 1 would be to lay the foundations. This would include: one, establishing a central surveillance authority. Establish a dedicated cryptographic regulatory body with a clear mandate for licenses, compliance, coordination and continuous development of policies.
Two, aligning the standards of LMA / CFT (anti-whip of major part of terrorism financing) with the directives of the Financial Action Working Group (FATF). Develop a framework for anti-white-terrorism and anti-terrorism financing specific to crypto with KYC Robust standards, transactions monitoring and an application.
Three, clarifying legal definitions and regulatory directives. Define cryptographic assets, service providers and blockchain applications to eliminate ambiguity. Define rules for capital requirements, risk management and investor protection.
And, four, suppliers of virtual license (VASP). Require the registration and granting of licenses for exchanges, portfolios and guards to ensure the protection of consumer and regulatory compliance.
Phase 2 would imply an innovation controlled by one, by adopting a double -level license model. Inspired by models in Singapore and Japan, a two -level system can slightly regulate small innovators while requiring more strict compliance of large players, ensuring flexibility and systemic safety.
Two, widening regulatory sand stores and pilot programs. Controlled testing environments allow the government to observe, learn and adapt to cryptographic innovations without exposing the wider financial system to shocks. The SECP sandbox should be widened and focused on blockchain, digital payments and tokens assets.
Three, creating a legal framework for the use of blockchain. Beyond cryptocurrencies, blockchain can rationalize governance, logistics and file holding. A national blockchain strategy, with a legal clarity that accompanies it, can improve the efficiency and confidence of the public sector.
Phase 3 would concern the protection, resolution and creation of value. This would imply consumer protection standards to apply transparency, secure childcare protocols and disclosure to protect users and strengthen market confidence. Data protection laws would require encryption and secure the processing of personal and financial data on all cryptographic platforms to avoid improper use and ensure confidentiality. Accelerated arbitration and mediation frames for conflicts related to cryptography and blockchain would also be necessary.
The last phase – phase 4 – would concern strategic integration. It would first be the regulation and incentive to extraction of Bitcoin. With a surplus electricity in certain regions and an increase in global demand, Pakistan can explore the exploitation of Bitcoin under respectful environmental license – offering tax incentives and clean energy solutions to attract legitimate investments.
Second, the development of a tax policy of cryptocurrencies. Introduce capital gains and clear income tax structures on digital assets to support budget transparency, while increasing income.
Third, the promotion of innovation and international cooperation. Offer incentives to blockchain startups and collaborate with international partners for the cross -border application and knowledge sharing.
The world of digital assets quickly reshapes global economies and Pakistan faces a critical moment. The technology redefining finance, the country must act quickly to create a robust regulatory framework that protects consumers, combat illegal activity and establishes its position in the global digital economy.
Nature without border of the crypto offers unlimited opportunities, but without urgent action, Pakistan may be left behind.
The writer is a lawyer and partner based in Islamabad at HKN, practitioners and advisers. She graduated from King’s College in London and can be attached to: (protected by e-mail)
Warning: The points of view expressed in this play are the own writers and do not necessarily reflect the editorial policy of Geo.TV.
Originally published in the news
