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Cryptocurrency and its underpinning technology blockchain brought along with them both good and bad qualities. One of the off-putting qualities of digital currencies is their tendency to be used for criminal activities.
Providing a decentralized network with priority to anonymity, blockchain technology can be used for all sorts of fraudulent activities including funding terrorist groups, tax evasion, cybercrimes, and money laundering. To make matters worse, the crypto sphere has no standard rules or regulations to control how these virtual coins are generated, exchanged, or utilized. Any criminal who knows his way around can get by unscathed. This makes it a safe haven for cybercriminals and other fraudsters.
Stemming from this alarming fact, governments in different countries across the globe have been on their toes devising safe rules and regulations that would protect crypto investors as well as encourage the growth and acceptance of the technology. On April 1st, the Pakistani media outlet Tribune reported that the government of Pakistan has taken a bold step by introducing a new regulatory standard to curb the alarming menace that litters this sphere.
Although the full details behind the upcoming regulations are yet to be introduced, a regulatory mechanism tagged Electronic Money Institutions (EMIs) is designed to help regulate virtual currency operations in the country. This is in line with the directives given by the G20’s Financial Action Task Force (FATF).
Before now, the FATF has warned against funding terrorist groups through virtual currencies and also tax evasion all forms of money laundering. This step’s purpose is to send a message across that the body is committed to fighting money launders at all levels. The Task Force admitted that, if left unchecked, virtual currencies could become the very bane of technology. As this new digital economy continues to grow, the Task Force fears that a time would come when governments would be unable to contain the menace in the sphere.
To combat this imminent danger, they advised some forms of regulations should be put in place to keep everyone in check. The Tribune reports that the regulations were embraced with open arms and that plans are being made to take them into effect them immediately.
In line with that, Pakistan is currently working on activating these institutions by introducing the Electronic Money Regulations which controls the EMIs. The EMIs would be employed as licensed tools by the government; the government also reserves the right to withdraw or suspend any license that deviates from the EMR.