ISLAMABAD: The risks associated with cryptocurrencies “far outweigh” the benefits, the Pakistani central bank governor has said, weeks after a mega crypto scam hit the country and the State Bank recommended banning virtual payment systems.
Thousands of Pakistanis lost life savings in a $100 million cryptocurrency scam, Pakistan’s Federal Investigation Agency (FIA) said last month, with investigators estimating that some 37,000 people, mostly from middle-class households in Punjab’s Faisalabad, had been defrauded after investing money in a scheme which promised to multiply funds.
Speaking at the recent MASIC Annual Investment Forum in Riyadh, Pakistan central bank chief Reza Baqir said cryptocurrencies posed a risk to financial and monetary stability due to acute price fluctuations and their distributed and decentralized nature.
“In Pakistan, we as the central bank have reached the conclusion as of now that, for us and in terms of the core objectives of the central bank, the potential risks far outweigh the benefits,” Baqir said, according to a transcript of the speech released by the State Bank of Pakistan (SBP) this week.
“As many of you would be aware, we are not alone in reaching this conclusion. Many large emerging markets, including China, India, Russia, among others have reached similar conclusions.”
Virtual currencies were prone to be used for illegal economic activities and posed the risk of widening the gray economy, capital flight and consumer protection issues, the SBP governor added.
Speaking about why advanced economies had a more “permissive” attitude toward virtual currencies, the governor said: “One reason may be that in many of the advanced economies there is little practical threat that their currency, in many cases one of the major currencies of the world in which trade and finance is denominated, would be replaced by a new virtual currency.”
Another valid concern, according to him, was the impact of virtual currencies on promoting capital outflows, and more generally, capital volatility.
“Since by definition such currencies cannot be monitored, regulators are at a loss to determine the impact on the balance of payments, representing another key risk,” he added.
Pakistan’s central bank declared in 2018 that virtual currencies like Bitcoin were not legal tenders issued or guaranteed by the country’s government.
But despite not being recognized by the SBP, interest in cryptocurrencies has been on the rise. The country ranked third in the global crypto adoption index in 2020-21, after India and Vietnam. The federal chamber of commerce said in a report last year Pakistan had recorded around $20 billion in cryptocurrency value in 2020-21, showing an abnormal increase of 711 percent.
The central bank has not commented on FPPCI’s findings so far but in January recommended banning cryptocurrency, arguing that allowing it would cause capital flight. A committee formed by the Sindh High Court to deliberate on virtual currencies also urged imposing a “complete ban.”
The recommendations came as the court last year heard a constitutional petition filed in 2019, which sought to overturn the central bank’s guidance from 2018 advising banks and payment system operators against processing and investing in virtual currencies.
But proponents of cryptocurrency trade in Pakistan argue that the risks, and scams such as the one unearthed last year, are caused by the absence of a legal framework.
Waqar Zaka, a Pakistani TV host and activist who has filed a court petition in favor of allowing digital currencies, said regulation would help keep fraud at bay.
“I pleaded with the court that people have invested billions of rupees in crypto trade and the government should not declare it illegal,” he told Arab News in an interview last year. “Instead, it should devise a mechanism to legalize the business, and keep a check on transactions.”
Cryptocurrency risks ‘far outweigh’ benefits, Pakistan central bank chief says at Riyadh forum
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Cryptocurrency risks ‘far outweigh’ benefits, Pakistan central bank chief says at Riyadh forum
- Thousands of Pakistanis recently lost life savings in $100 million cryptocurrency scam
- In the wake of the scam, State Bank has recommended banning virtual currencies in Pakistan
Pakistan launches operation in Kurram district, sets up camps for displaced families
- Tribal and sectarian clashes since Nov. 21 have killed at least 136 people in Kurram and caused medicine, food and fuel shortages
- A senior police official says military will lead the operation in Kurram’s Bagan area, with police providing ‘second-tier support’
ISLAMABAD: Pakistani security forces have launched an operation to clear the northwestern Pakistani district of Kurram of militants, a senior police official said on Sunday, following months of unrest in the region.
Kurram, a district of around 600,000 people in Pakistan’s Khyber Pakhtunkhwa (KP) province, has been rocked by tribal and sectarian clashes since November 21, when armed men attacked a convoy of Shia passengers, killing 52 people.
The attack sparked further violence and blockade of a main road connecting Kurram’s main town of Parachinar with the provincial capital of Peshawar, causing medicine, food and fuel shortages in the area, as casualties surged to 136.
The operation in Lower Kurram comes after the KP government announced the establishment of camps for temporarily displaced persons (TDPs), following an ambush on a supply convoy that killed 10 people on Thursday.
“The operation has commenced in Lower Kurram’s Bagan area and the sanitization process to clear the area is underway,” Abbas Majeed Marwat, the Kohat regional police officer (RPO), told Arab News.
“The military will lead the operation, with the police providing second-tier support through the Elite Force, regular police, and other security forces.”
Asked about the scale of the operation, Marwat said it was targeted at specific areas where militants were using hideouts to sabotage peace efforts.
“The operation will focus on certain pockets, particularly in Bagan and its adjacent areas,” he said.
Thursday’s ambush targeted a convoy of 33 vehicles set to resupply local traders in the region with rice, flour and cooking oil and two aid vehicles carrying essential medicine. It followed a similar attack on a supply convoy this month that injured five people, including a top administration official in the region.
The violence has continued despite a peace agreement signed between the warring tribes on Jan. 1. Under the peace agreement, both sides had agreed on the demolition of bunkers and the handover of heavy weapons to authorities within two weeks.
RPO Marwat said the operation aimed to target elements “embedded within the local community who were acting as spoilers.” He said authorities had completed arrangements for TDPs, while some families had already left the most affected areas to stay with their relatives elsewhere.
“The commissioner of Kohat and I visited the proposed sites for TDP camps in Hangu to inspect the administrative and security arrangements,” he told Arab News on Sunday.
“As of yesterday, more than 20 families had relocated [from Bagan] and more are leaving because the situation here remains critical.”
Separately on Sunday, the KP government announced action against militants in violence-hit areas of Kurram, following a high-level huddle in Peshawar.
“Action against few miscreants in the affected areas has become unavoidable and a decision has been made to take strict and indiscriminate action against miscreants,” said a statement issued from the office of KP government spokesperson Mohammad Ali Saif.
For the past three months, the statement said, the KP government had been working hard to restore peace and stability in Kurram, and a peace agreement was reached through a grand jirga in line with Pashtun traditions.
“A few miscreants in Kurram have attempted to sabotage the peace agreement,” it said, adding that the militants attempted to assassinate Kurram Deputy Commissioner Javedullah Mehsud, leaving him seriously injured, and were also targeting security personnel and supply convoys.
The statement said the government feared that the “miscreants” had infiltrated peaceful communities, and to protect peaceful citizens, they would be separated.
“Alternative housing arrangements have been made for the affected population,” it added.
Feuding tribes have battled with machine guns and heavy weapons in Kurram, cutting off the remote and mountainous region bordering Afghanistan from the outside world.
Provincial authorities have been supplying relief goods and transporting ailing and injured people from Kurram to Peshawar via helicopters since late last month.
Pakistan commerce minister arrives in Cambodia to hold bilateral trade talks
- The development comes amid Pakistan’s push to revive its $350 billion economy since avoiding a default in June 2023
- Commerce Minister Jam Kamal Khan will attend the inaugural Joint Trade Committee and Ministerial Meeting in Phnom Penh
ISLAMABAD: Pakistani Commerce Minister Jam Kamal Khan on Sunday arrived in Cambodia on a three-day official visit to hold bilateral trade talks, his ministry said, amid Pakistan’s push for trade and investment.
The commerce minister will participate in the inaugural Joint Trade Committee and Ministerial Meeting in the Cambodian capital of Phnom Penh, according to the Pakistani commerce ministry.
Upon arrival, Khan was received by Pakistan’s Ambassador to Cambodia Zaheer Uddin Baber Thaheem and Tith Rithipol, undersecretary of state from the Cambodian ministry of commerce.
“The visit aims to strengthen bilateral trade ties, explore new economic opportunities, and enhance cooperation between the two nations,” the Pakistani commerce ministry said in a statement.
“The meetings are expected to cover a range of topics, including trade facilitation, investment prospects, and market access.”
The development comes amid Pakistan’s efforts to revive its $350 billion economy since avoiding a default in June 2023. The South Asian country last year secured a new $7 billion loan from the International Monetary Fund (IMF) and has been actively pursuing trade and investment opportunities to put the economy on the path of recovery.
The Pakistani commerce ministry said Khan’s visit marked a “significant step” toward deepening economic engagement between Pakistan and Cambodia.
“Further discussions and agreements are anticipated during the visit,” it added.
Minister calls for strict measures to curb carbon emissions to deal with Pakistan smog crisis
- Pakistan’s eastern Punjab province experiences smog each year, with the provincial capital of Lahore ranking second among world’s most polluted cities on Sunday
- Officials say smog is a byproduct of large numbers of vehicles, construction and industrial work as well as burning of crop residue at the start of winter season
ISLAMABAD: Pakistan’s Law Minister Azam Nazeer Tarar on Sunday called for the enforcement of stringent policy measures to mitigate heat-trapping carbon emissions from vehicles in order to tackle the issue of smog, Pakistani state media reported.
Pakistan’s eastern Punjab province experiences dense smog each year, with the provincial capital of Lahore ranking second among the world’s most polluted cities on Sunday, according to Swiss air monitor IQAir.
Late last year, the province closed down schools and offices, banned outdoor activities and shortened timings for restaurants, shops and markets in a bid to contain the crisis.
The dangerous smog is a byproduct of large numbers of vehicles, construction and industrial work as well as burning of crop residue at the start of the winter wheat-planting season.
“Smog has emerged as a serious environmental and public health concern,” Tarar said as reported by Radio Pakistan, stressing the need to ensure conformity with Euro-5 or higher-grade fuels to improve the air quality and mitigate heat-trapping carbon emissions.
The comments came at a meeting of a committee to implement the National Climate Change Policy, aimed at steering Pakistan toward climate resilience and low carbon development.
Officials informed the participants that efforts had already been ramped up to transition the South Asian country to renewable energy sources, with significant investments in solar, wind, and hydropower projects.
“The government’s plan to achieve a 30 percent share of renewables in the energy mix by 2030 is well on track and all-out efforts are being made to promote Electric Vehicles to reduce the environmental impact of transportation,” they were quoted as saying.
Pakistan is among countries deemed most vulnerable to extreme weather caused by climate change, despite contributing less than 1 percent to global carbon emissions, according to officials.
In 2022, devastating floods, blamed on human-driven climate change, killed more than 1,700 Pakistanis, affected another 33 million and caused the country over $30 billion in economic losses.
Top Bangladeshi commander meets Pakistan Navy officials, discusses regional maritime security
- The development comes amid a thaw in relations between both nations since PM Sheikh Hasina’s ouster in August
- The two sides discussed joint military exercises, reciprocal visits and training exchange programs, Pakistan Navy says
ISLAMABAD: Lt. Gen. SM Kamr-ul-Hassan, principal staff officer (PSO) of the Bangladesh armed forces division, on Sunday met senior Pakistan Navy officials and discussed with them regional maritime security cooperation, Pakistan Navy said.
Lt. Gen. Hassan toured Pakistan Navy ships and units during his visit to the southern Pakistani port city of Karachi, according to the Directorate General Public Relations (DGPR) of Pakistan Navy.
He met Pakistan Fleet Commander Rear Admiral Abdul Munib, Coast Commander Rear Admiral Faisal Amin and Managing Director of Karachi Shipyard & Engineering Works (KS&EW) Rear Admiral Salman Ilyas.
“During these engagements, discussions focused on professional matters of mutual interests, including regional maritime security and bilateral defense collaboration,” the DGPR said in a statement.
“Various potential areas of cooperation were highlighted, such as joint military exercises, reciprocal visits, and training exchange programs between the two countries.”
Pakistan and Bangladesh were once one nation, but they split in 1971 as a result of a bloody civil war, which saw the part previously referred to as East Pakistan seceding to form the independent nation of Bangladesh.
In the years since, Bangladeshi leaders, particularly former prime minister Sheikh Hasina, chose to maintain close ties with India. Relations between Pakistan and Bangladesh have warmed up since Hasina’s ouster as a result of a student-led uprising in August, witnessing a marked improvement.
“The visit of Lt. Gen. SM Kamrul Hassan is expected to further strengthen defense ties between the two brotherly nations, enhancing cooperation and solidifying the bonds between the armed forces of Pakistan and Bangladesh,” Pakistan Navy said.
Lt. Gen. Hassan, who is currently on a visit to Pakistan, this week met Chief of Army Staff (COAS) General Asim Munir in Rawalpindi, according to the Inter-Services Public Relations (ISPR), the Pakistani military’s media wing. During the meeting, both military commanders stressed the need for an enduring partnership between the two countries to remain “resilient against external influences.”
Earlier in the day, the Trade Development Authority of Pakistan (TDAP) said it would send two trade delegations to Bangladesh on Jan. 19-20 to increase bilateral relations and economic collaboration as both countries move to repair strained ties.
“The first delegation of dates comprising 13 exporters will leave for a week-long visit on Jan. 19 while the second delegation of citrus will leave for a business-to-business (B2B) meeting on Jan. 20,” the TDAP said.
The delegations will explore more trade opportunities, promote business partnerships and Pakistan’s export potential in the Bangladeshi market, it added.
The development comes days after the signing of a landmark agreement between Pakistan and Bangladeshi businesspersons to establish a joint business council between the two countries.
Pakistan’s Deputy Prime Minister Ishaq Dar is also scheduled to visit Dhaka at the start of February to further consolidate the relations between the two countries.
Pakistan to launch yuan-denominated Panda bonds by June, finance minister says
- The South Asian country intends to raise approximately $200 million from Chinese investors through Panda bonds
- Muhammad Aurangzeb says the move is part of a strategy to achieve sustainability in Pakistan’s balance of payments
ISLAMABAD: Finance Minister Muhammad Aurangzeb has said that Pakistan plans to launch yuan-denominated Panda bonds in June to enhance its presence in Chinese capital markets, Pakistani state media reported on Sunday.
The development follows an upgrade in Pakistan’s sovereign rating by all three major credit agencies. The country aims to get into the “single-B” category that would allow it to return to global bond markets to raise funds.
Aurangzeb said the South Asian country intends to raise approximately $200 million from Chinese investors through the issuance of the Panda bonds, the Radio Pakistan broadcaster reported.
“This step is part of a broader strategy to transition Pakistan’s economy toward export-driven growth, with a focus on achieving sustainability in the country’s balance of payments,” he was quoted as telling Hong Kong’s TVB news channel.
The South Asian country is navigating a challenging economic recovery path and has been buttressed by a $7 billion facility from the International Monetary Fund (IMF) in September. The government is optimistic it will meet the terms of the program.
Pakistan is being advised on the issuance of Panda bonds by the China International Capital Corporation, a partially state-owned financial services company, according to the finance minister. However, the latest figure is lower than the $300 million targeted by Pakistan last year.
Aurangzeb extended an invitation to Hong Kong to send delegations to explore trade and financial opportunities in Pakistan, according to the Radio Pakistan report.
“Hong Kong could serve as a strategic hub for joint ventures between Chinese and Pakistani companies,” he said.
To revive its $350 billion economy, Pakistan has been making efforts to position itself as a regional trade and transit hub by leveraging its strategic geopolitical position.
The South Asian country has witnessed a flurry of visits, investment talks and economic activity involving officials from Saudi Arabia, United Arab Emirates, China and Central Asian nations in recent months.
