Pakistan has banned banks from trading cryptocurrency and Initial Coin Offerings or ICOs. Pakistan's central bank, the State Bank of Pakistan or SBP, also urged public to be cautious of and refrain from any cryptocurrency activities including mining, trading, exchanging, transferring value, promoting, and investing.
SBP's move comes a day after similar move by India, which banned banks providing services to investors in digital currencies. The Reserve Bank of India asked banks already providing such services to cryptocurrency investors to stop them within a specified time.
In a statement, SBP noted that virtual currencies/ Coins/Tokens, like Bitcoin, Litecoin, Pakcoin, OneCoin, DasCoin, Pay Diamond etc. are not recognized as a legal tender. The bank said it has not authorized or licensed any individual or entity to trade these in Pakistan.
In the document, SBP noted that virtual currencies/ Coins/Tokens, which provide high degree of anonymity, potentially can be used for facilitating illegal activities. The individuals trading in these currencies will not get any legal protection or recourse in the event of a loss, it said.
SBP, which regulates domestic and international transfer services, is said to have warned Pakistani citizens not to use cryptocurrencies to transfer money abroad. Such persons will face prosecution, it said.
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