By Syed Raza Hassan
KARACHI, Pakistan, Jan 13 (Reuters) - Pakistan's central
bank has recommended banning cryptocurrency, arguing in
documents submitted in an ongoing court case that allowing it
would cause capital flight.
The Sindh High Court has been hearing a constitutional
petition filed in 2019, which seeks to overturn central bank
guidance from 2018 advising banks and payment system operators
against processing and investing in virtual currencies.
The court sought advice from a committee headed by a deputy
governor of the central bank, which submitted its report on
Wednesday.
“The State Bank of Pakistan has concerns over the trading
of cryptocurrencies by individuals and entities, as it results
in outflow of foreign exchange from the country,” the committee
wrote in the report, reviewed by Reuters.
It noted that cryptocurrencies were all issued outside of
Pakistan, and said Pakistani residents buying such tokens would
send capital abroad.
"After a careful risk-benefit analysis, it emerged that
risks of cryptocurrency far outweigh its benefits for Pakistan,"
the report said.
Pakistan has been grappling with a currency devaluation,
high inflation, current account deficit and dwindling foreign
reserves.
(Reporting by Syed Raza Hassan
Editing by Peter Graff)
© 2024 Thomson/Reuters. All rights reserved.