The Pakistani government appears to be moving quickly towards a pro-crypto stance. Following a commitment to integrate Bitcoin into its financial system, the country is taking steps to legalize mining.
Earlier this week, Sumera Shams, a member of the Provincial Khyber Pakhtunkhwa (KP) Assembly, announced on Twitter that the legislative body had passed a progressive law on crypto mining.
Khyber Pakhtunkhwa's Assembly anonymously passed my resolution on #Cryptocurrency & #Cryptomining. Indeed #Pakistan progressing towards digitalisation to compete the world. Kudos to @ZiaBangashPTI & @fawadchaudhry for their hard work and dedication in the field. https://t.co/id2LUnnGBo pic.twitter.com/TbQvYDsMEl
— Dr Sumera shams (@SumeraShams) December 2, 2020
Embracing the Digital Finance Wave
Khyber Pakhtunkhwa is one of the four main provinces in Pakistan, located in its northern region. Further confirmation from Zia Ullah Bangash, an Advisor to the Chief Minister of Khyber Pakhtunkhwa on Science and Technology and Information Technology, highlighted that the area had indeed moved to legalize crypto mining. Bangash attached a picture with his tweet, showing a proposal sent to the region’s chief minister.
Local news sources claimed that the draft resolution stated that digital currencies would most likely replace fiat in the near future. Hoping to provide an embracing environment, ministers and advisors are calling on the government to take action. The new bill reportedly passed in a unanimous vote, suggesting that the region is gearing up for a significant crypto push.
Waqar Zaka, a social media activist and pro-crypto influencer, was optimistic about the development. He tweeted, “One province done, three more to go.”
There is currently no indication that the remaining provinces are about to adopt cryptocurrencies in any form, but this is a significant move forward nonetheless.
Pakistan now appears to be toeing the same line as Iran, which has managed to capture a considerable share in the global crypto mining market since legalizing the activity last year.
Crypto Regulation on the Way
Pakistan has been relatively slow to adopt cryptocurrencies. However, the country has ramped up its regulation efforts significantly in recent times. Last month, the Securities and Exchange Commission of Pakistan (SECP), the country’s financial regulator, submitted a digital asset consultation paper.
Issued on November 6, the paper highlights several major concepts for the country’s rapidly-growing digital finance market. It also aims to take pointers from neighboring jurisdictions and their existing regulatory frameworks.
In the document, the SECP emphasized that digital assets are the cornerstone of the digital finance industry.
Marking a distinction between the different types of digital assets, the SECP particularly notes utility and security tokens. The regulator explained that security tokens are particularly advantageous because they can fractionalize assets, reducing investment barriers for retail investors. Other benefits include high liquidity, transparency, greater automation, and improved clearing mechanisms.
The agency added that the consultation paper focused on private cryptocurrencies alone. There are no plans for issuing a Central Bank Digital Currency (CBDC), which many other countries have begun exploring. The consultation will continue, with the SECP looking to engage industry players from within and without as it looks to develop a robust regulatory regime.