According to FATF, “countries are permitted, but not required, to prohibit virtual assets and virtual asset service providers.”
In light of recent reports that the Financial Action Task Force (FATF) urged Pakistan to impose a crypto ban, the global anti-money laundering institution clarified its position.
In its announcement, the FATF emphasized that it “does not require countries to indiscriminately ban virtual assets and virtual asset service providers.”
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The FATF emphasized that the institution called on nations to comprehend the risks linked to money laundering and terrorist financing in the crypto sector. It also insisted on countries licensing or registering crypto exchanges to supervise them like other financial institutions.
The FATF also stressed that it obligated virtual asset service providers to adopt preventive measures similar to the ones of financial institutions. These measures include customer due diligence, maintaining records, reporting suspicious transactions, and compliance with its travel rule.
The statement from FATF comes in response to claims made by Pakistan’s Minister of State for Finance and Revenue, Aisha Ghaus Pasha, who reportedly asserted that the FATF had specified that cryptocurrencies could not be legal in Pakistan for the country to avoid the watchdog’s “grey list” – a list of nations under enhanced scrutiny.
Despite the ongoing narrative, the FATF did not directly address Pakistan’s Minister of State for Finance and Revenue remarks but clarified that “countries are permitted, but not required, to prohibit virtual assets and virtual asset service providers.”
Local media outlets quoted Pasha informing the country’s Senate Standing Committee on Finance that cryptocurrencies would “never be legalized in Pakistan.”
In 2022, Pakistan’s central bank announced its intention to ban cryptocurrencies, marking its first clear stance on emerging financial technology.
It is worth noting that at the end of 2022, Pakistan revealed plans to launch central bank digital currency in 2025.
Amid the uncertainties concerning Pakistan’s stance on cryptocurrencies, the FATF’s clarification underlines that a country’s decision to ban or regulate cryptocurrencies is largely its own prerogative. As this discourse unfolds, it’s clear that how countries navigate the rapidly evolving landscape of cryptocurrencies is an issue of increasing interest to global regulators and crypto enthusiasts alike.