State Bank warns the General public through a public awareness notification that cryptocurrencies not a legal tender in Pakistan.
So any investment in cryptocurrencies by the general public may produce a loss of investment.
State Bank has warned the general public about Bitcoin, Litecoin, Pakcoin, OneCoin, DasCoin, Pay Diamond, etc that these cryptocurrencies or neither legal tender in Pakistan nor state bank have authorized any individual or an institution to deal or promote these cryptocurrencies.
Further to this State Bank has even advised commercial banks and other licensed institutions by state banks not to facilitate their customers in dealing, purchasing, selling, transferring, or investing in these cryptocurrencies mentioned above.
State banks took this step because of the nature of virtual currencies which involve a high risk of investment loss and can be used in illegal activities and there is no protection mechanism in case of loss/ fraud/hacking.
Find at below link State Bank notification regarding Public awareness about cryptocurrencies
State bank in this notification inform about three reasons why cryptocurrencies can be harmful to general public investment
-First cryptocurrencies are highly volatile in nature. Their value and worth depend upon the main speculations of market leaders. their price worth jumps high and comes down instantly as there is no mechanism to control or regulate the value of cryptocurrencies.
-Secondly, the cryptocurrencies business can be closed by any unpredictable action like legal action. SO in this case the investment of the general public may suffer to lose.
-Thirdly there is a high level of fraud and hacking involved in the business of cryptocurrencies as there have been found many instances where wallets and accounts involved in cryptocurrencies were hacked or compromised.
So it is obvious that there is a high level of risk involved in the cryptocurrency business and there is a big risk for the general public to invest in cryptocurrencies.
Further to this State Bank of Pakistan has also warned the general public against pyramids schemes that promise high returns but these schemes are frauds as these are not authorized by the State bank of Pakistan or the Securities and exchange commission of Pakistan. SO these schemes are are very risky for the general public and state banks ask not to invest in such schemes.
Further to this State Bank has stated that local and international money transfer companies are licensed and regulated by the State Bank of Pakistan and no entity is licensed or permitted to deal in or to transfer money from Pakistan to any international destinations in cryptocurrencies.
Due to all the above-given reasons, State Bank warns the general public not to involve in investment, transfer, purchase, selling, mining in coins, tokens and cryptocurrencies due to the potential risk involved that can cause financial and legal risk for the general public.