In recent developments, Pakistan has taken significant steps to position itself within the global cryptocurrency landscape. By reaching out to foreign exchanges and virtual asset service providers, the nation is set to create a formal regulatory framework for cryptocurrency.
This initiative, driven by the Pakistan Virtual Assets Regulatory Authority (PVARA), comes on the heels of the newly established Virtual Assets Ordinance, paving the way for international players to engage with the local market.
Pakistan: Welcoming Overseas Crypto Players
PVARA is actively inviting established crypto exchanges and service providers to submit their Expressions of Interest (EOIs) to operate within Pakistan. This strategic move aims to formalize the crypto ecosystem and align it with effective regulation.
The procedure allows for participation from global players provided they adhere to the necessary compliance standards, fostering an environment that is both secure and regulated for local users.
Regulatory Compliance and Requirements
As per the latest updates, potential applicants are required to possess licenses from at least one respected global jurisdiction, such as the US, UK, EU, UAE, or Singapore.
Furthermore, these companies must demonstrate robust frameworks encompassing anti-money laundering (AML), counter-terrorism financing (CTF), and know your customer (KYC) protocols. Interested firms need to include comprehensive operational details and security measures in their submissions.
Market Dynamics: Size and Potential
Pakistan’s cryptocurrency market is projected to encompass approximately 40 million users, with annual trading figures nearing $300 billion. These statistics highlight both the vast potential and regulatory challenges that lie ahead.
PVARA and various regional media outlets cite these numbers as a justification for engaging with international exchanges, underscoring the need for a structured and supervised implementation of cryptocurrency transactions.
Regulatory Framework and Long-Term Vision
The newly introduced Virtual Assets Ordinance empowers PVARA with the authority to license and supervise all virtual asset operations throughout Pakistan.
This milestone complies with global standards advocated by regulatory bodies such as the FATF, aiming to harmonize local regulations with international norms. The thoughtful planning leading up to this move also included discussions around the implementation of a central bank digital currency.
Industry analysts believe that this regulated approach could entice reputable international exchanges, enhancing consumer protection while simultaneously mitigating the risks associated with unregulated markets.
Nevertheless, firms must prepare for the compliance costs and intricacies involved in adapting to these new regulations. Experts caution that while establishing regulations is crucial, the enforcement aspect remains pivotal for the program’s success.
The efficacy of oversight will ultimately determine whether this licensing venture achieves its intended goals.
Image source: PlanetofHotels.com, Data chart: TradingView
