Pakistan is working on implementing a new legal framework for regulating the crypto sector. The Securities Exchange Commission of Pakistan (SCEP) unveiled this news through a consultation paper published on its website on November 6. Reportedly, the publication highlights the main concepts of the rapidly-growing digital finance industry in the country. On top of this, the consultation paper examines the regulatory frameworks of other countries across the globe.
Talking about digital currencies in the consultation paper, the regulator said,
“Digital assets also known as Virtual Assets, and Crypto Assets are the start of a new era of Digital Finance, and demand innovative regulatory measures and approaches by the regulators across the world. This could only be possible by initiation of a new era that re-invents regulatory regime/measures as they are known to the regulators globally today.”
SCEP went on to note that the publication aims to shed some light on several crypto-related topics. These include the basic definition, concepts, and inner workings of digital assets, the approaches that regulators around the globe have adopted to deal with the nascent asset class, the mechanisms SCEP would use to regulate crypto in the country, and the way forward toward developing a strong regulatory framework. Additionally, the paper seeks to present policy suggestions to participants and shareholders in the Pakistani crypto scene.
The regulator went on to note that the paper solely focuses on non-governmental or non-central-bank-issued crypto assets, not on Central Bank Digital Currencies (CBDCs).
SCEP’s bullish stance on crypto
Differentiating various types of cryptocurrencies, SCEP focused on security tokens and utility tokens. Per the regulator, security tokens have numerous advantages. However, a single feature stands out, according to SCEP, and this is the ability to fractionalize each asset. This feature helps minimizes investment barriers for retail investors. Apart from this, the regulator added that security tokens have high levels of transparency, improved liquidity, enhanced clearing and settlement mechanisms, and a variety of automation tools.
The SCEP added that it will continuously engage with market players and welcome feedback from the crypto industry to develop an efficient regulatory framework for the sector.
This news comes after Pakistan unveiled that it sought to introduce new digital currency regulations for electronic money institutions in April 2019. Reportedly, the country’s decision to formulate a legal framework for cryptocurrencies came after increasing demands from the Financial Action Task Force (FATF).
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