The National Bank of Pakistan (SBP) issued information to clarify the bank’s position on digital currencies. Although the statement “proposes” that the public and institutions do not process coins, it is not entirely forbidden.
National Bank of Pakistan: Caution on the risk of virtual currency,
From the beginning of this release it was pointed out that digital currency is not recognized by the bank as fiat currency:
"[Digital currencies]" has not been confirmed as a legal tender, nor has any person or entity authorized or authorized by SBP to issue, sell, purchase, exchange or invest any such virtual currency/coin in Pakistan. Token. "
Then it continues to require banking institutions (banks, and payment system operators and payment service providers) to prevent account holders from conducting digital currency transactions or participating in ICOs:
"It is recommended that it is not convenient for its client/account holders to trade in virtual currency/Initial Coinage Products (ICO)."
Near the end of the one-page document, it goes on to warn about "crooks," which provide "pyramid investment plans and coins and are expected to achieve high returns (similar to the Ponzi scheme)."
In general, although this statement is rather harsh, it does not constitute a total ban. The conclusion is simply that people must avoid digital currencies to “avoid any potential economic loss and legal impact”, but it does not explain what these legal implications actually are.
National Bank of Pakistan: Worries
According to the press release, SBP worries that d digital currency provides "highly anonymity and may be used to promote illegal activities"; and due to the "fuzziness of nature" of digital currency," In the event of loss, no individual has any legal protection or recourse."
SBP details the following related risks:
a) High price volatility in investments related to virtual currencies is highly volatile, mainly based on speculation; b) Failure/shutdown of virtual currency exchanges/companies due to any reason (including actions by law enforcement agencies); And c) crypto currency exchange and purse hacking/security compromises
Contrary to widespread rumors circulating on social media, the central bank has never said that the use of cryptocurrency in the country is illegal. On the other hand, the announcement only pointed out that cryptocurrencies are not recognized as legitimate bids in the country and users should be very cautious when using them. The only exceptions are those who try to transfer value outside Pakistan – this is the only case that has been declared illegal.
Reserve Bank of India
This Pakistani arrival to this country's neighbors has become a headline in the encryption space soon after. The government of India and the Reserve Bank of India (RBI) had previously warned the public about digital currencies. New Delhi announced earlier this year that the use of these coins was cancelled, which is considered illegal. Late last week, the Reserve Bank of India made a clarification of its position on coins:
"The Reserve Bank has repeatedly reminded users, holders and traders of virtual currency (including Bitcoin) to handle various risks associated with the handling of such virtual currencies. In view of the related risks, it has been decided to take effect immediately. An entity supervised by the RBI may not process or provide services to any individual or business entity handling or placing a VC . A managed entity that has provided such services shall withdraw from the relationship within the prescribed time.”
In the past few months, the number of Indian digital currency transactions has fallen sharply as banks have been taking measures to limit the security of cryptocurrency transactions
Although RBI acknowledges its support for blockchain related technology, the bank believes that digital currency has triggered a series of concerns related to consumer protection, market integrity, and prevention of financial crimes