Islamabad:
The central bank said Wednesday that restrictions under the Currency Control Act (Fera), including the maximum annual $ 100,000 limit, will apply to foreign transfers of digital currencies. The statement emphasizes challenges in introducing a new digital currency regime in Pakistan.
State Bank of Pakistan (SBP) also said it is working to launch a new digital currency. It would be used for trade in digital assets. But this can only happen after Pakistan Virtual Assets Regulatory Authority (Pvara) proposal is adopted, the State State Bank of the Pakistan Act is changing and a legislative framework is introduced.
SBP functioning Deputy Governor Dr. Inayat Hussain, which appears for the senate’s standing committee for financing. He said the borders of the law will apply, including the maximum outbound transfer of $ 100,000 of an individual in one year.
The committee, led by PPP Senator Saleem Mandviwalla, began clause-for-clause discussions on the proposed Pvara Bill. The government has already issued a Pvara Ordinance and is now seeking parliamentary approval to provide permanent legal coverage to the authority.
However, the Ministry of Law and Justice, which helped to prepare the regulation, emphasized that there will be challenges in the implementation of Fera on digital assets.
“There is a need for some changes to Fera as it cannot be implemented on digital assets in its current form,” said Shehroz Bakhtiyar, legal consultant for the law department while informing the committee.
Legislators supported his vision. “It is simply not possible for SBP to monitor any outgoing digital transaction due to the nature of these transactions,” said PML-N senator AFNANULLAH KHAN. He said Pakistanis have invested more than $ 21 billion in digital assets and that it is high time that the government adopted a law to regulate trade.
Bakhtiyar said it would be binding for licensee to implement the $ 100,000 limit. But he agreed that enforcement of the border would be difficult in practice, considering how these markets work.
Pvara delivers the broader legal framework for the sector, the acting vice -generation said. He added that the detailed legislative framework would be completed later.
Both the government and the SBP have expressed concern about the consequences of the new regime for the economy and the country’s international obligations. Law Ministry said these issues would be addressed through appropriate legislation.
Promise and regulations such as Fera, the financial action group (FATF) recommendations and the Law on Money Laundering The Money Would Apply to Digital Assets to make the Regime’s airtight, attorney General Raja Naeem Akbar told the committee.
He said foreign companies dealing with digital currencies, such as Binance, would have to set up offices in Pakistan and Fera would also apply to them.
Akbar said the Para Bill proposal had been discussed by Pakistan Crypto Council. He rejected the impression that the bill was copied everywhere.
Dr. Hussain said SBP would issue a digital currency that could be used to buy any digital asset. He said the value of the digital currency would be equal to the value of the rupe. A bank account holder would be able to handle both currencies in the same account.
He said that when the digital currency is issued, the central bank will ask business banks about their need for digital assets. Customers would have the opportunity to receive rupees or digital rupees from their bank accounts, he added.
“The gold standard must be the digital currency in the central bank and it must be under control of the SBP,” said Senator Afnanullah Khan.
Bakhtiyar said the central bank’s digital currency would be regulated under the SBP Act. He said Pvara would have no regulatory authority to control the central bank’s digital currency.
On a proposal from PML-N senator Anusha Rahman, the committee set the top age limit of 55 years for appointment as chairman of Pvara. The candidate must have at least five years of experience in digital financing and technology. The committee also included a member of the National Assembly and a senator as the members of the authority.
To a question, the functioning Deputy Denizer said that restrictions on banks and dealers to trade in digital currencies would remain in place until the new legal framework is in place.
At the first Pvara meeting, SBP blocked a step to immediately declare digital currencies legal. It warned that allowing transactions without a regulatory framework could create serious challenges.
SBP’s 2018 instructions also declared dealing with Cryptocurrencies illegal and required banks to report such transactions as suspicious of the Financial Monitoring Unit (FMU).
The circular enlightened that digital currencies such as Bitcoin, Litecoin, Pakcoin, Onecoin, Dascoin, Pay Diamond or ICO -Tokens are not legal bid. It said they are neither issued nor guaranteed by the government.
The committee recommended to place Pvara under the administrative control of the Ministry of Finance instead of the cabinet department to make it more efficient.
Under the proposed law, digital services providers may offer nine services: advisory, brokerage dealer, custody, exchange, loans and borrowing, virtual asset divisions, activation management, transfer and settlement and FIAT-Reported token issuance.
The committee postponed further considerations on the bill until its next meeting.
