Islamabad:
The Minister of Finance, Muhammad Aurangzeb, warned on Saturday that the Pakistani risks date back to the gray list of the financial action group due to unregulated digital transactions made by around 15% of the population, seeking to set up a transparent regulatory regime.
“If a certain level of activity occurs and occurs on this scale, it is only a question of knowing when, not so, that we are going to be in trouble as a country, as a sovereign again,” said Senator Aurangzeb while speaking during the workshop on the top leadership on the block chain and digital assets: technology and innovation.
The Minister added that in terms of knowledge of your client (KYC) and anti-flowage sanctions, Pakistan has left the gray list after six years with great difficulty and this (digital transaction) cannot be a reason to return.
His statement made two days before the government convened the first meeting of Pakistan Virtual Assets Regulatory Authority (PVARA), which will be held on Monday. The session will examine key policy elements and discuss how to move forward with a regulatory framework, said the minister.
Aurangzeb shared that more than 25 million people or 10 to 15% of the country’s population, especially young people, are involved in digital companies and this cannot be ignored. In this context, Aurangzeb said that the increase in activity must be regulated due to the danger of international sanctions.
Digital transactions have so far been illegal in Pakistan and amendments related to the declaration of legal digital currencies are pending for the approval of the federal firm. Prime Minister Shehbaz Sharif has been a committee to examine these amendments more, in particular the proposal to allow double nationals to become the central bank’s sub-government.
Aurangzeb underlined the need for Pakistan to accelerate its adoption of blockchain, artificial intelligence (AI), cryptocurrency and web technologies 3.0 to strengthen the country’s digital economy.
The Minister of Finance said that the world had already progressed in this space and that Pakistan should not be lagging behind. “We were very blessed in terms of obtaining international collaborations and transfers of international success. We do not need to start from Ground Zero and use these models and see whether it works or not for Pakistan.”
“We have to speed up our trip in terms of new economy, and the ministry is ready to help,” he added.
The Minister of Finance noted that the country’s economy is evolving in the right direction and highlighted Pakistan’s successful exit from the FATF gray list, while urging greater transparency in digital transactions.
The Minister said there was an offensive element, an economic element and that there is a defensive element from a regulatory point of view, which the government would examine.
Aurangzeb said that from next week, the permanent parliamentary committees would begin to discuss the virtual asset order, which the government had promulgated a few weeks ago to establish an independent regulator for virtual assets and cryptocurrencies.
Under the ordinance, the government has created “Pakistan Virtual Asset Regulatory Authority (PVARA), which is an autonomous federal organization empowered to concede, regulate and supervise entities dealing with virtual assets”.
The PVARA is based on ad hoc legislation, which will expire in four months and can be extended by four additional months. To give it a permanence, the two chambers of Parliament must adopt the Pvara law.
The authority has obtained complete powers to ensure transparency, compliance, financial integrity and the prevention of illicit activities in alignment on international standards, including those of GAFI.
Under the prescription, any person or company intends to offer virtual asset services in or from Pakistan must be authorized by the PVARA. A structured license regime will be introduced, with specific requirements for incorporation, operational capacity, compliance executives and report obligations, added the press release.
The prescription also incorporated a manager for responsible innovation by establishing a regulatory sandbox, allowing emerging technologies and commercial models to be tested under surveillance surveillance. “Technology is to be faster, cheaper and better. If blockchain, AI, crypto and web 3.0 can, in the context of the economy, provide this for Pakistan, that is why we collectively pull,” he said.
