Regulation of Digital/Crypto Asset Trading Platforms in Pakistan- 2020 Updates
As per the most recent initiatives taken by SECP’s (Securities and Exchange Commission of Pakistan) “Securities Market Division” it can be predicted that Pakistan will soon be legalizing ownership and trading of digital and crypto assets. In a position paper issued on 6th November 2020, Securities Market Division has proposed what digital/crypto assets are, their possible definition for recognition and how Pakistan can set a robust regulatory regime for digital/crypto assets. This policy exclusively focused on regulating non-governmental crypto assets.
Back in June 2019, the Financial Action Task Force (FATF) defined Virtual Assets which points clearly towards Crypto assets as:
“A virtual asset is a digital representation of value that can be digitally traded, or transferred, and can be used for payment or investment purposes. Virtual assets do not include digital representations of fiat currencies, securities and other financial assets that are already covered elsewhere in the FATF Recommendations”.
The focus point of this position paper was to point out the need to develop a policy and regulatory response to Digital Assets in Pakistan where these crypto or digital assets are defined to be either utility tokens or security tokens. SECP has acknowledged that this advancement in technology will ensure the efficiency of capital markets, consumer and investor protection and exchange control.
Taking a step forward, SECP will be holding multiple discussion sessions with relevant field leaders which will be posted on SECP’s website and social media and welcomes everyone for any input or comments at Feedback@secp.gov.pk.