Central Bank of Pakistan prohibits cryptocurrencies

The Central Bank of Pakistan issued a statement that prohibits the country’s financial companies from working with cryptocurrency companies, becoming the last institution of this type to block activity.

In a statement posted on its website (and circulated through social media), the State Bank of Pakistan (SBP) said:

“… all banks / IFD / microfinance banks and payment system operators (PSO) / payment service providers (PSP) must refrain from processing, using, negotiating, maintaining, transferring value, promoting and investing in virtual currencies / tokens. In addition, banks / IFDs / Microfinance banks and PSO / PSPs will not provide their customers / account holders with transactions in VCs / ICO Tokens. Any transaction in this regard will be reported immediately to the Financial Monitoring Unit (FMU) as a suspicious transaction. ”

The central bank did not respond to a request for comment. But from the moment of publication, the announcement is already having an impact on the local cryptocurrency scene.

Urdubit, an exchange of cryptocurrencies that was launched for the first time in 2014 with the aim of building a base of support in the region, said following the declaration that it will be closed. Urdubit was the first Bitcoin exchange platform that opened its doors in the country.

The decision was announced through Facebook, and the startup urged its clients to “withdraw their funds as soon as possible.”

Urdubit’s Facebook post included a link to the central bank’s correspondence, which included a warning that the transactions were labeled suspicious.

In statements, Rodrigo Souza, co-founder of BlinkTrade (which provided the open source software used by Urdubit), argued that the central bank’s measure aims to curb investment in cryptocurrencies.

“Governments and banks are going to fight Bitcoin because investing Bitcoin means a banking operation in the central bank,” he said, adding:

“We are working hard to return all PKRs to all our customers before our bank closes our accounts.”

The measure comes a day after the central bank of India prevented banks from doing business with cryptocurrency exchanges. But as it was later reported, the exchanges in that country are contemplating a legal challenge that could see the dispute discussed before the highest court in India.