Govt proposes ‘legalising cryptocurrency’ in new amendments

ISLAMABAD: The federal government has proposed amendments to the State Bank of Pakistan (SBP) Act including legalising the use of digital currencies in Pakistan.

As per the proposed amendments, the use of digital currencies and cryptocurrencies like Bitcoin, could become legal tender. The new legislation to section 4C will empower the central bank to issue and regulate digital currency directly.

According to government sources, another proposed amendment would allow dual nationals to serve as governors, deputy governors, and non-executive directors on the central bank’s board.

Furthermore, the proposed amendment in existing subsection (d) of section 9A would allow the SBP board to approve financial reports including SBP’s annual report, half-yearly report, reports on the state of the economy, the financial stability report, and financial statements of banks.

The proposed amendments define digital currency as “a digital form of currency issued by the bank under section 24 as legal tender under section 25.” Section 24 authorises the SBP to issue banknotes, which are recognised as legal tender under section 25.

According to the media, the state bank also intends to establish a subsidiary to develop and operate digital payment systems. Moreover, the amendments to section 17 authorise the central bank to conduct digital currency business.

As per the new amendments, it also proposes a penalty for unauthorised digital currency issuance. “Anyone found issuing digital currency illegally would be fined an amount equal to twice the value of the illegal issuance,” it added.