"Pakistan will ban cryptocurrency services operating in the country and never legalize crypto trading, Minister of State for Finance and Revenue Aisha Ghaus Pasha said at a session of the Senate Standing Committee on Finance and Revenue on May 16."
"Pasha said banning crypto was one of the requirements set by the Financial Action Task Force (FATF), which removed Pakistan from its gray list in October."
"The gray list contains countries the body considers deficient in Anti-Money Laundering and Counter-Terrorist Financing measures but that are working with it to remedy their shortcomings."
Cryptocurrencies have been gaining increasing popularity in Pakistan with the annual trading volume going up to $25 billion, up from approx. $18-$20 billion a year ago.
Banks in Pakistan have already started informing customers that cryptocurrency trading is illegal, at least two sources told CoinDesk.
This attempted ban comes at a time of political turmoil for Pakistan, while "the Pakistani rupee's value has fallen a "staggering" 57.4% against the dollar over the past year."
FAFT continues to pressure countries
Meanwhile. FATF's President T. Raja Kumar, urged G-7 leaders to "effectively" implement FATF's crypto anti-money laundering norms ahead of their meeting this weekend.
"Around the globe, countries have made progress in implementing most of the standards; however, progress on implementing FATF’s updated requirements on crypto assets has been relatively poor," Kumar said.
According to Kumar, 73% of countries are still "non-compliant or only partially compliant" with the watchdog's standards.
"G-7 countries taking the lead in "fully and effectively implementing FATF’s global standards is crucial to our collective success," Kumar said."
FATF's controversial "travel rule" requires crypto service providers to collect and share information on transactions above a certain threshold.
FATF is an unelected international organization based in Paris, France, established with a purpose is to propose KYC/AML surveillance policies and pressure countries into adopting them. Its proposals involve trusted intermediaries and are incompatible with basic security practices of the digital age.
FATF itself cannot impose sanctions on non-compliant countries, but its findings are used to influence government and corporate policies.