KARACHI: Sindh High Court (SHC) on Monday ordered Deputy Governor State Bank of Pakistan (SBP), Director Securities & Exchange Commission of Pakistan (SECP), Secretary Finance Ministry and Director, Cyber Crime FIA Karachi to appear on October 19, 2021 on a petition, seeking to regularize crypto currency business in the country.

SHC bench issued the orders the petition of one Waqar Zaka, who wants to open business concerning crypto currency exchange in Pakistan.

According to the written order of SHC, SBP has issued directions to banking companies banning any transaction in crypto currency. Counsel for SBP referred to Banking Companies Ordinance, 1962 and State Bank of Pakistan Act, 1956.

Court observed that this ordinance and Act are more than 50 years old. Financial markets of Pakistan changed in the course of time. “For example we have now the Pakistan Stock Exchange; dealings in derivatives etc. Such institutions and transactions were not available at the time of promulgating Ordinance, 1962 and 1956 Act,” court stated.

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Court maintained that globally crypto currency is becoming an accepted mode of transaction and in many countries, prima facie, it seems that regulating banks and their exchange commission putting in place safeguards to ensure that the use of crypto currency is allowed but subject to restrictions so that money laundering, terrorist financing and other illegal banking transactions are avoided.

Court observed that Pakistan should also move with the times recognizing that crypto currency is now a part of business transactions.

The fact that the SBP and SECP are not allowing crypto currency business transactions is driving this mode of trade underground and thereby, prima facie, causing such trade and transactions in the black. Court stated that Pakistan needs to move with the times and should embrace crypto currency business or otherwise and regulate the same.

Court declared that on next date of hearing, Deputy Governor of SBP, who is fully cognizant with the crypto currency market and globally how it is regulated in other countries, shall appear in person and explain what the SBP is doing in order to facilitate this business whilst making appropriate regulations for the same and stated that t Director of SECP, who is also familiar with the crypto currency business shall also appear in person before this Court and assist the SBP as well as this court that how this crypto currency can be allowed and regulated.

Secretary Finance Department, Government of Pakistan shall also send a representative fully conversant with crypto currency business, who shall also assist this Court on this issue on the next date of hearing, court ordered.

Copyright Business Recorder, 2021