The Pakistani Government has introduced Electronic Money Institutions (EMIs) Regulations for digital currencies, according to English-language Pakistani news outlet, Express Tribune. The plans are in accordance with recommendations from the policy-making body, the Financial Action Task Force (FATF). The regulations will be introduced immediately.
The licensing scheme will be used to prevent crimes such as money laundering and terrorist financing as well as help with the regulation of digital currency throughout the country. FATF had stated that combating cryptocurrencies in relation to crime would become a challenge for future governments and effective measures were needed.
Islamabad was given a 27-point action plan that it needed to implement by September 2019. The country was placed on the FATF’s grey-list last year, meaning its laws to combat terrorism financing and money laundering were “strategically deficient”
The FATF reviewed progress in certain key areas. The main changes Pakistan needed to put into effect were that sanctions must be applied in cases of money laundering and terrorism financing, they needed to demonstrate better cooperation between authorities identifying illegal money flows, and enhance support for prosecutors.
On the basis of these areas, the FATF identified five actions for their first review. Pakistan has taken all the five actions prescribed.
India Hoping To Place Pakistan On Black-List
Other states on the FATF grey list include Ethiopia, Serbia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia and Yemen. Black-listed countries or “non-cooperative” countries include The People’s Republic of Korea and Iran.
Pakistan’s inclusion on the list makes it more difficult for the government to access international markets at a time when the economy is in trouble, it brings extra scrutiny from regulators and financial institutions that can limit trade and investment.
Pakistan has been lobbying to have India removed from the co-chair of FATF because they fear India would place them on the black-list. India has pressed for Pakistan to be kept on the terrorism financing watchlist following an attack in disputed Kashmir that was claimed by a Pakistan-based militant group.
The new regulations will be introduced in a ceremony today at the Islamabad office of the State Bank of Pakistan.