Pakistan's Financial Regulator SCEP Prepares to Regulate Cryptocurrencies

Pakistan's financial regulators SCEP is working on a framework to regulate trade of cryptocurrencies like Bitcoin (BTC).

November 12, 2020 | AtoZ MarketsThe Securities and Exchange Commission (SECP) of the Islamic Republic of Pakistan, which is located in South Asia and is a neighboring country of India, is preparing to enact regulations on the trading of digital assets.

Pakistan's regulator SCEP to regulate cryptocurrencies

SECP says it has the potential to become more mature and improve financial efficiency in areas such as custody and settlement in the digital asset sector, and will actively seek regulatory feedback from market participants and companies in the future.

In the document, the SECP emphasized that it will regulate not virtual currencies such as central bank digital currency (CBDC), but digital assets that support assets such as securities. It is said that it is taking regulations in its own country with reference to the regulatory framework of other countries.

The advantage of digital assets is that they can be subdivided. It is possible to lower the hurdles for subdividing and investing in conventional assets such as securities and real estate and improve liquidity.

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Digital assets such as securities and bonds can be issued more easily, making it easier for new small issuers to enter.

Meanwhile, regarding the regulation of virtual currencies, Pakistan's central bank SBP announced in 2018 that it will ban the use of all virtual currencies including Bitcoin. Domestic banks are also prohibited from conducting operations related to cryptocurrency transactions.

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