Reza Baqir, Governor of the State Bank of Pakistan (SBP), has reiterated his stance on bitcoin, arguing that it lacks a use case that may assist the banking regulator in achieving goals like financial inclusion and innovation.
During a panel discussion at the 13th Karachi Literature Festival on Sunday, Mr. Baqir agreed that the underlying technology behind crypto, distributed ledger, “is an absolutely useful technology” that has the potential to solve a lot of the problems that the world faces right now in providing access to finance.
Mr. Baqir added, “When we look at the value proposition given by crypto right now, the use cases that have been brought up are merely exchanges.”
He noted that consumers wanted the regulator to enable them to use Bitcoin, speculate on it, and then move money internationally.
“Every new thing has advantages and disadvantages. It is the responsibility of policymakers to analyze the balance… in particular, to determine if the advantages exceed the hazards when it comes to the usage of cryptocurrencies in Pakistan,” he added.
Pakistan fails to see the real potential of crypto
The governor of the SBP has raised worry about the lack of visibility of cryptocurrencies. “A regulator or law enforcement agency has no way of knowing who is engaging in transactions and why.”
As a result, cryptocurrencies are being used for various purposes throughout the world, including human rights violations, human trafficking, money laundering, and a variety of other things, according to him.
“Especially considering Pakistan is on the FATF’s grey list,” Mr. Baqir added, the SBP’s primary mission was to promote financial inclusion and avoid financial system exploitation.
He’s referring to the Financial Action Task Force (FATF), a global money laundering and terrorism funding watchdog that has had Pakistan on its heightened surveillance list since 2018.
He also stated that the Pakistani banking system has previously been exploited to launder money or finance terrorists.
Thousands of views of relevant videos on social media and transactions on online exchanges have fueled a surge in cryptocurrency trading and mining in Pakistan.
While crypto is not illegal in Pakistan, the FATF has encouraged the government to enhance regulation.