Pakistanis are using alternatives to trade cryptocurrencies even after the State Bank of Pakistan banned banks and financial institutions from dealing in cryptocurrencies. The trade volumes are also returning to normal.
Pakistanis are finding new ways of trading cryptocurrencies even after the State Bank banned commercial banks and financial firms from dealing in cryptocurrencies.
The volume of cryptocurrency trades slumped after the ban but is returning to normal as users find an alternative by the name of Localbitcoins. In the week of April 28, already more than 163 million Pakistani Rupee (>1.4 million USD) worth of Bitcoin volume traded in Pakistan according to Coin Dance. This volume almost reached the all-time highs of December-January.
Since the ban, the price of Pakcoin, which is the country’s first and only cryptocoin, jumped by more than 60 percent. Pakcoin founder Abu Shaheer says that ban by the bank is only serving to favor crypto trades. For instance, it is only serving to expose the name of the coin and more people are getting interest in it.
People are already using the coin for mobile phone credit top-ups.
The Central Bank gave a circular in early April prohibiting dealing in virtual currencies similar to the Reserve Bank of India. And although the Reserve Bank of India gave banks and traders three months to comply, SBP did not.
According to the directive, all banks, micro finance entities, payment system operators and service providers should refrain from dealing in cryptocurrencies.
This affected cryptocurrency exchanges such as Urdubit, which was exchanging about 100 different digital coins. However, daily across all mediums before the ban.
The crypto exchange closed after the ban and asked clients to withdraw both their fiat and their crypto funds. Some users still have Bitcoins in their accounts on the platform a month after the ban.
Danyal Manzar, the exchange’s CEO says there are alternative ways of trading the Bitcoins for those willing to. He says cryptocurrencies would disrupt stock markets and not the entire monetary system.
“About 80 to 85% of the traders from stock exchanges came to try their luck in virtual currency,” he said.
Meanwhile, the government is planning to eventually ban all cryptocurrencies according to Asia Times. Thus, quoting the Ministry of Information Technology and Telecommunication.
The government official said,
“We have forwarded our recommendation for a ban on all forms of virtual currency trading. And proper legislation is being working on”.