Cryptocurrency has no legal status: FinMin, SBP

Islamabad: The Ministry of Finance and the State Bank of Pakistan (SBP) have revealed in the Standing Committee on Finance of the National Assembly that cryptocurrency business is banned in the country and it does not have any legal status yet.

It was informed in the meeting of the Standing Committee on Finance that the government has established the Cryptocurrency Council and started initial work on it. However, a legal and regulatory framework will be required for cryptocurrency business. Only the Crypto Council can provide details regarding cryptocurrency.

Finance Secretary Imdadullah Bosal told the Standing Committee that the cryptocurrency business is banned in Pakistan and has no legal status. The Crypto Council has been established on the executive order of the Prime Minister. The Finance Minister is the head of the Council, while the Prime Minister’s Special Assistant Bilal bin Saqib is the CEO of the Council. The SBP and Securities and Exchange Commission of Pakistan (SECP) are represented in it. I was not considered worthy of being made a member of the Crypto Council.

State Bank Executive Director Sohail Jawad told the committee that the SBP has given its recommendations to the Crypto Council on crypto and Bitcoin, but there should be a regulatory framework for it. He said that so far, cryptocurrency has been legalized in only one country in the world, but they are also withdrawing their decision.

The meeting of the Standing Committee on Finance was held under the chairmanship of Chairperson MNA Nafisa Shah. The committee members expressed reservations over the lack of legal status of cryptocurrency business and said that cryptocurrency investment is ongoing in the country, and a lot of fraud is also taking place in it.

Committee member Sharmila Farooqi stated that money laundering and tax evasion are taking place through cryptocurrency, and the government should launch an awareness campaign in this regard.

Mirza Ikhtiar Baig added that people are investing in cryptocurrency, and there is a big risk in it. Shahram Khan said that he has heard that the government is investing millions of dollars in cryptocurrency.

The standing committee has summoned the Finance Minister, Crypto Council CEO Bilal Saqib, and other members for a detailed briefing in the next meeting, while the Secretary of Power has also been summoned to the next meeting on the issue of allocating 2000 MW of electricity for crypto mining.

In addition, Chairman of Federal Bureau of Revenue (FBR) Rashid Mahmood Langrial told the standing committee that the rebate taken from the teacher is being restored. The decision taken last year has been withdrawn, and it will also be made part of the next finance bill.

Some members of the committee also objected to Section 99D of the Income Tax Act, under which Rs29 billion was collected from banks as windfall. The FBR Chairman said that this is only for banking companies that earned huge profits during the appreciation of the rupee.

Mirza Ikhtiyar Baig told the committee that the FBR withdrew Rs100 million from the account of a restaurant in Karachi and also froze it. The committee directed the FBR to submit a detailed report on this matter.

The standing committee was told that petrol worth billions of rupees is smuggled from Iran, which is causing huge losses in terms of the petroleum levy.

The FBR Chairman said that 400 customs officials are deployed in Balochistan. We are trying our best, however, there are other law enforcement agencies there. Omar Ayub Khan said that the FBR should improve its monitoring system to stop smuggling.