Central Bank of Pakistan: Blockchain is more useful than cryptocurrencies

The governor of the State Bank of Pakistan (SBP) stated that crypto assets, unlike useful blockchain technology, can be used for illegal activities.

Speaking at a panel discussion at a literature festival in Karachi, SBP CEO Reza Baqir spoke about cryptocurrencies and blockchain. The manager said that blockchain technology is “absolutely useful” as it can solve financial problems and many other problems that governments of the world face.

However, each innovation has not only advantages, but also threats. Bakir explained that cryptocurrencies work on the basis of useful technology, and it is difficult for law enforcement agencies to track who makes transactions and for what purpose. Therefore, cryptocurrencies can be used for money laundering, trading in illegal items and the like, the governor of the Pakistani central bank fears:

“The main goal of the SBP is to increase the availability of financial services to the public in order to limit the misuse of the financial system. We need to strive to maintain a balance so that the risks of new technologies do not outweigh their advantages.”

Pakistan is on the gray list of the Financial Action Task Force (FATF). Although cryptocurrencies are not banned in Pakistan, Bakir believes it is necessary to change the approach to regulating the industry by working out clear regulatory rules that crypto firms and miners must comply with.

In March last year, Pakistan already established the KP Crypto Advisory Committee, which consults with industry experts to develop legislative regulation of mining and crypto assets. Recently, local media reported that due to the unfriendly position of the Central Bank of Pakistan, the country’s authorities may completely ban the use of cryptocurrencies.