Pakistan Exploring Crypto Regulations? SECP Publishes Exploratory Report

The Securities and Exchange Commission of Pakistan, also known as SECP, is working to develop a regulatory framework for Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term. The report comes according to a paper on private digital assets that the SECP published on November 6th. The SECP further said that it “welcomes any input/comments.”

The document’s stated purposes include to create a “definition to recognize digital assets in Pakistan,” as well as to find a “way forward for designing and developing a robust regulatory regime at par with the World for regulating Digital Assets,” as well as to “present policy proposals to industry participants and stakeholders.”

Importantly, though, the SECP’s report does not contain any information on plans for the creation of or Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term of a Pakistani central bank digital currency (CBDC), though the country has announced that it will develop a CBDC by 2025. Rather, the SECP’s report focuses exclusively on private digital assets, specifically, security and utility tokens.

Two Regulatory Approaches: Use Existing Regulations, or ”Let Things Happen”

Notably, the SECP seems to use the document as an opportunity to emphasize that digital assets are the “start of a new era of digital finance”; the regulator also says that this new era “could only be possible by the initiation of a new era that re-invents regulatory regime [or] measures as they are known to the regulators globally today.”

The paper outlines two possible approaches that are “available” for regulating digital assets.

The first of these is described as “regulating and restricting new products according to existing regulations, and may in some instances even entail outright banning,” the paper said. “Under this approach, innovators are obliged to adapt to the prevailing regulatory environment.”

The second method is “based on the conjecture of ‘let-things-happen’ approach, described by the [United States] Commodity Futures Trading Commission (CFTC) as the ‘do-not-harm’ approach (Giancarlo, 2018), where the financial sector is considered as dynamic and the associated need to innovate is strongly emphasized.”

While the paper was “mainly prepared based on the second approach,” the document did not explicitly say that this approach was more appropriate for building regulations in Pakistan.

Pakistan Prepares for the Age of Digital Assets

The paper is the latest development in a series of steps that Pakistan has taken towards adopting new frameworks for digital money and cryptocurrency assets.

CoinTelegraph reported last year that the country was developing plans to introduce new digital regulations for institutions that deal with electronic money. Additionally, as previously stated, the country announced that it was working to launch a CBDC by 2025.