The Sindh High Court on Monday directed State Bank of Pakistan (SBP) deputy governor and Federal Investigation Agency’s director cybercrime wing to appear in person in a petition challenging the ban imposed by central bank on cryptocurrency.
The high court directed the finance secretary to explain the measures taken to legislate the use of cryptocurrency in the country.
Social media activist Waqar Zaka had challenged a circular reportedly issued in April 2018 by the SBP that barred the business of virtual currencies exchange.
Zaka, who was pleading his case in person, apprised a two-judge bench headed by Justice Muhammad Karim Khan Agha that many unregistered companies had been dealing in cryptocurrency for many months.
To a query of Justice Agha, counsel for the SBP, submitted the ban had been imposed to curb misuse of the cryptocurrency in accordance with Banking Companies Ordinance 1962 and State Bank of Pakistan Act 1962.
Justice Agha observed that the ordinance and act were more than 50 years old and financial markets of the country had changed.
“Globally cryptocurrency is becoming an accepted mode of transaction and in many countries, prima facie, it seems that regulating banks and their exchange commission putting in place safeguards to ensure that use of cryptocurrency is allowed but subject to restrictions so that money laundering, terrorist financing and other illegal banking transactions are avoided,” observed the judge.
Pakistan should also move with the times and recognise that cryptocurrency is now part of business transaction, remarked the judge.
Justice Agha observed that instead of banning the digital currencies legislature should have regulated it via proper laws. He held that the SBP and SECP by not allowing cryptocurrency transactions were driving this mode of trade underground.
The court asked the respondents to file their detailed replies to the petition and directed the state counsel to file details of the steps taken by FIA against the unregistered companies dealing in the virtual currencies. Further hearing in the matter deferred till October 19.