The government of Pakistan will soon release draft regulations for financial institutions that wish to provide services related to cryptocurrency and other digital assets, according to local English-language news outlet The Express Tribune.
Citing sources in Pakistan's ministry of finance, the article states that a ceremony to introduce the new regulations is being held today, April 1, at the Islamabad office of the State Bank of Pakistan (SBP). According to Pakistan's finance minister, who attended the meeting, the Pakistani government is committed to transforming the country into a knowledge-based economy. It believes that information technology will help create more jobs and develop "world-class knowledge workers in sync with international market trends."
To this point, the finance minister said, "It is our government's policy to encourage the use of e-commerce amongst [the] public through awareness campaigns to promote a culture of e-commerce in the country, which supports electronic business transactions at national, regional and international levels."
According to The Express Tribune, the Pakistani government will develop these regulations based on recommendations from the Financial Action Task Force, which warned the Pakistani government that cryptocurrency could be used to finance terror organizations and other illegal schemes. The new regulations will be developed using the draft Regulation for Electronic Money Institutions published by the SBP in October 2018.
The report stipulates that companies involved in providing services related to cryptocurrency and digital assets must implement sufficient protocols to protect their investors' funds and personal data, such as names, ID card numbers, addresses, and telephone numbers. In addition to these requirements, Electronic Money Institutions must also thoroughly vet incoming and existing executives and maintain enough capital to back up customers' investments.
Although Pakistan has not been very active in the cryptosphere, the country has made a small footprint in the ecosystem. In May 2017, the country's Federal Board of Revenue launched an investigation into bitcoin traders suspected of tax evasion. In April 2018, the SBP banned regulated entities from providing services related to cryptocurrency.