As an analyst with extensive experience in the financial sector and having closely followed the developments of cryptocurrencies in various countries, I find this potential move by Pakistan to legalize Bitcoin and Ethereum, as well as establish a national digital currency framework, a significant step forward.
The Pakistani government has recently suggested modifications to the State Bank of Pakistan Act, which could pave the way for the acceptance of cryptocurrencies such as Bitcoin and Ethereum within the nation. Additionally, they are planning to create a comprehensive system for a potential national digital currency.
As a researcher, I’ve just learned that, under the advice of the Ministry of Law, our country’s Finance Ministry has proposed a set of approximately twelve changes to our federal government. These amendments aim to introduce the concept of digital currency into our nation’s regulatory framework for the very first time. This marks an important step towards embracing the digital economy.
Cryptocurrencies Could be Legalized in Pakistan
The plans being examined by the cabinet at present propose that the State Bank of Pakistan could oversee Pakistan’s currency, whether in traditional or digital form. This expansion of the central bank’s responsibilities would give it the possibility to develop and release its own Central Bank Digital Currency (CBDC) in the future.
The suggested changes for this development are made by modifying Sections 4C and 17 of the SBP Act. These sections detail the bank’s power to control currency issuance and administration.
In the newly established system, digital currencies will be considered as “electronic equivalents to money issued by the country’s central bank.” These digital assets will hold the same status as traditional legal tender. This definition sets up a legal foundation for the Central Bank of the Philippines (SBP) to issue and circulate cryptocurrencies within this framework.
If passed by parliament and turned into legislation, the Financial Ministry anticipates that the proposed amendment could establish a controlled setting where digital currencies are officially acknowledged by the government. This step could be groundbreaking since the SBP has previously cautioned against Bitcoin and other digital currencies due to their anonymity, which raises concerns about their potential connection to illicit activities and lack of legal protection for users.
Furthermore, this new policy enforces penalties on the unapproved release of digital assets within Pakistan. Anyone caught releasing digital money without banking approval may be subjected to fines equal to twice the worth of the unauthorized issue.
Expanding the SBP’s Governance Powers
Beyond cryptocurrencies, the amendment also addressed significant national concerns, including a possible revision of Section 13 in the SBP Act. At present, this section prevents individuals with dual citizenship from holding positions as governors, deputy governors, or non-executive directors on the SBP board.
As per Finance Minister Muhammad Aurangzeb’s statement, a limitation enforced in January 2022 has narrowed down the number of eligible individuals capable of assuming those roles. Furthermore, he emphasized the importance of broadening the pool of talented leaders for the State Bank of Pakistan (SBP).
The suggested adjustments in the policy intend to expand the authority of the SBP board. For example, Section 9A might be revised to widen the board’s supervisory duties, enabling them to endorse annual reports, economic assessments, and financial stability reviews.
As a researcher, I propose that streamlining Section 9B will enhance administrative efficiency by empowering either the board chairman or any three non-executive members to call for a meeting. This change would eliminate the need for all board members to be present for such gatherings.
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2024-11-04 19:45