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Pakistan Bars Banks from Crypto and ICO Trading
A long-running cryptocurrency exchange in Pakistan is closing its door following a new advisory from the country's central bank.
By David Floyd
Updated Sep 13, 2021, 7:47 a.m. Published Apr 6, 2018, 9:36 p.m.
Pakistan's central bank issued a statement barring financial companies in the country from working with cryptocurrency firms, becoming the latest institution of its kind to bar the activity.
In a statement posted to its website (and circulated via social media), the State Bank of Pakistan (SBP) said:
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"...all Banks/ DFIs/ Microfinance Banks and Payment System Operators (PSOs)/Payment Service Providers (PSPs) are advised to refrain from processing, using, trading, holding, transferring value, promoting and investing in Virtual Currencies/Tokens. Further, banks/DFIs/Microfinance Banks and PSOs/PSPs will not facilitate their customers/account holders to transact in VCs/ICO Tokens. Any transaction in this regard shall immediately be reported to Financial Monitoring Unit (FMU) as a suspicious transaction."
The central bank did not respond to a request for comment. But as of press time, the announcement is already having an impact on the local cryptocurrency scene.
Urdubit, a cryptocurrency exchange that first launched in 2014 with the goal of building a base of support in the region, said in the wake of the statement that it will shut down. Urdubit was the first bitcoin exchange platform to open its doors in the country.
The decision was announced via Facebook, with the startup urging its customers to "please withdraw your funds as soon as possible."
Urdubit's Facebook post included a link to correspondence from the central bank, which including the warning about transactions being tagged as suspicious.
Speaking to CoinDesk, Rodrigo Souza, the co-founder of BlinkTrade (which provided the open-source software that Urdubit has used) argued that the central bank move is aimed at putting the brakes on cryptocurrency investment.
"Governments and Banks are going to fight Bitcoin because investing Bitcoin means a bank run on the central bank," he said, going on to add:
"We are working hard to return all PKR to all our customers before our bank shutdown our accounts."
The move comes a day after India's central bank blocked banks from doing business with cryptocurrency exchanges. But as CoinDesk subsequently reported, exchanges in that country are eyeing a legal challenge that could see the dispute argued before India's highest court.
Pakistani rupee image via Shutterstock
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