According to the SCEP, digital assets are the beginning of a new era of digital finance.
The regulator is currently focusing on regulating private crypto coins, not CBDCs.
The SCEP believes that security coins offer a high degree of transparency and increased liquidity.
Pakistan is working on the implementation of a new legal framework for the regulation of the crypto sector. The Pakistan Securities and Exchange Commission (SCEP) announced this news in a consultation paper published on its website on November 6th. The publication reportedly highlights the key concepts of the country’s fast-growing digital financial industry. The consultation paper also examines the regulatory framework in other countries around the world.
In the consultation paper, the regulator talks about digital currencies, she said,
“Digital assets, also known as virtual assets and cryptographic assets, are the beginning of a new era in digital finance and require innovative regulatory measures and approaches from regulators around the world. This could only be possible by the start of a new era, in which the regulatory systems and policies as known to regulators around the world today are reinvented.
The SCEP further noted that the publication aims to shed some light on several cryptographic issues. These include the basic definition, concepts and inner workings of digital assets, the approaches that regulators around the world have adopted in dealing with the emerging asset class, the mechanisms that SCEP would use to regulate cryptography in the country, and the way forward to develop a strong regulatory framework. In addition, the paper seeks to provide policy suggestions to participants and shareholders in the Pakistani crypto scene.
The regulator further noted that the paper focuses exclusively on non-governmental or non-bank issued crypto assets, not on Central Bank Digital Currencies (CBDCs).
SCEP’s optimistic stance on the crypto scene
Distinguishing between different types of crypto currencies, the SCEP focused on security features and usage features. According to the regulatory authority, security tokens have numerous advantages. However, according to the SCEP, the only feature that stands out is the ability to fractionate any asset. This feature helps to minimize investment barriers for retail investors. In addition, the regulator added that security tokens have a high level of transparency, improved liquidity, enhanced clearing and settlement mechanisms and a variety of automation tools.
The SCEP added that it will continuously contact market participants and welcome feedback from the crypto industry to develop an efficient regulatory regime for the sector.
This news follows Pakistan’s announcement that it will introduce new digital currency regulations for e-money institutions in April 2019. The country’s decision to formulate a legal framework for crypto-currencies reportedly came after increasing demands from the Financial Action Task Force (FATF).