Islamabad:
The Minister of Finance, Muhammad Aurengzeb, warned on Saturday that Pakistan runs the risk of returning to the gray list of the Financial Action Task Force because the unregulated digital transactions are carried out approximately 15% of the population, seeking to establish a transparent regulatory regime.
“If there is a certain level of activity and occurs on this scale, it is just a matter of when, not if we will get into problems as a country, as sovereign again,” Senator Aurengzeb said while we talk in the workshop at the block leadership summit and digital assets: technology and innovation.
The minister added that in terms of meeting his client (KYC) and sanctions against money laundering, Pakistan left the grays list after six years with great difficulty and this (digital transactions) cannot be a reason to return there.
His statement occurred two days before the Government convened the inaugural meeting of the Virtual Assets of Pakistan (PVARA), which will be held on Monday. The session will review the key elements of the policy and discuss how to advance with a regulatory framework, said the minister.
Aurengzeb shared that more than 25 million people or 10-15% of the country’s population, especially young people, are involved in digital businesses and this cannot be ignored. In this context, Aurengzeb said that the greatest activity should be regulated due to the danger of international sanctions.
Digital transactions are so far illegal in Pakistan and amendments related to the declaration of legal digital currencies are pending for the approval of the federal cabinet. Prime Minister Shehbaz Sharif has constituted a committee to review these amendments even more, particularly the proposal to allow dual citizens to become attached governors of the Central Bank.
Aurengzeb emphasized the need for Pakistan to accelerate its adoption of blockchain, artificial intelligence (AI), cryptocurrencies and web 3.0 technologies to strengthen the country’s digital economy.
The finance minister said that the world has already progressed in this space, and Pakistan should not be delayed. “We have been very blessed in terms of obtaining some international collaborations and transfers of international success. We do not need to start from the zero zone and use those templates and see if it works for Pakistan or not.”
“We have to accelerate our trip in terms of the new economy, and the ministry is ready to help,” he added.
The Minister of Finance said that the country’s economy is moving in the right direction and highlighted Pakistan’s successful departure from the Fatf Gray list, while urging greater transparency in digital transactions.
The minister said that there is an offensive element, an economic element and that there is a defensive element from a regulatory point of view, which the government would see.
Aurengzeb said that from next week the permanent parliamentary committees would begin to discuss the ordinance of virtual assets, which the government had promulgated a few weeks ago to establish an independent regulator for virtual and cryptocurrency assets.
According to the Ordinance, the Government has established “the regulatory authority of Virtual Assets of Pakistan (PVARA), which is an autonomous federal body trained to license, regulate and supervise the entities that deal with virtual assets.”
Pvara is based on AD-Hoc legislation, which will expire in four months and can be extended for another four months. To give permanence, both houses of Parliament have to approve the Pvara Law.
The authority has been granted comprehensive powers to guarantee transparency, compliance, financial integrity and the prevention of illicit alignment activities with international standards, including those of FATF.
According to the ordinance, any person or company that intends to offer virtual asset services inside or from Pakistan must have a license for the PVARA. A structured license regime will be introduced, with specific requirements for the incorporation, operational capacity, compliance frameworks and reporting obligations, the statement added.
The ordinance also incorporated a framework for responsible innovation by establishing a regulatory sand box, allowing emerging technologies and business models to be tested under supervision supervision. “Technology is about being faster, more cheaper and better. If Blockchain, AI, Crypto and Web 3.0 can, in the context of the economy, deliver that for Pakistan, that is what we are shooting collectively,” he said.
