In Pakistan, the journey of cryptocurrency encounters hurdles yet embraces developing regulations!
In a bid to foster a safe and controlled growth of the digital economy, the Pakistani government has established the Pakistan Virtual Assets Regulatory Authority (PVARA), tasked with creating regulations, licenses, and laws for the digital assets sector. This move marks a significant shift in the country's approach towards digital currencies and blockchain technology.
The new regulatory body, PVARA, is led by a board comprising various stakeholders, including the Governor of the State Bank of Pakistan. The formation of PVARA aims to bridge the gap between existing trading activities and the evolving regulatory framework, providing a more conducive environment for the digital economy.
Meanwhile, the State Bank of Pakistan maintains a ban on crypto trading, a measure that has been in place since 2018. The bank argues that digital assets cannot be considered a legal currency. However, the bank recognizes the potential of digital currencies and is working on the creation of a Central Bank Digital Currency (CBDC). The specifics of the CBDC and its implementation in Pakistan are yet to be detailed.
The Pakistani government's approach to regulating crypto is cautious, aiming to strike a balance between encouraging innovation and protecting consumers and economic stability. The CBDC is expected to provide a safer and more regulated alternative to unregulated cryptocurrencies.
Regulators in Pakistan are facing the challenge of creating an environment that supports innovation while mitigating risks associated with digital currencies. PVARA is expected to create a clearer and more effective framework to regulate and facilitate the growth of the crypto sector in Pakistan.
Despite the ban on crypto trading, many Pakistanis continue to trade and invest in cryptocurrencies. The balance between economic security and acceptance of new technologies will largely determine the future direction of Pakistan's digital economy.
Going forward, the focus will be on creating a regulatory environment that encourages innovation while protecting consumers and maintaining economic stability. The success of this endeavour will play a crucial role in shaping the future of Pakistan's digital economy.
