Capacity-building for regulators and lack of awareness with regard to cryptocurrency are the biggest challenges in Pakistan.
This is according to a report from the RAIN which said the Pakistani Taxation Office estimated that the tax on crypto-assets would be worth around $90 million. This figure has been described as a potential given the market volatility of some of the crypto assets.
The key international player in the field and the first licensed crypto-asset company, RAIN has suggested the government, tax crypto assets and formulate regulations in this regard as European and Gulf countries have recognized it.
The recent fall of cryptocurrencies has brought about ample opportunities for governments to bring about stronger regulations for cryptocurrencies and even better, tax them as well. While countries like Pakistan have yet to impose regulations on them, there is no reason why this is not possible. Pakistan should tax and regulate crypto-assets too.
Pakistan is one such country where the people are still not allowed to invest in cryptocurrencies, this is because crypto-assets are still not regulated in Pakistan. The Pakistan government seems to have taken a strict stance against cryptocurrencies, banning the banks from working with crypto exchanges.
In the meeting with the Pakistani finance minister, the RAIN executives informed and highlighted that the Pakistanis were vulnerable to fraud while trading in crypto assets through irregular means.
The blockchain has been around for a while and a lot of hype has surrounded it. A lot of positive attributes have been seen in the blockchain. But what happens when there are fraudulent activities in an unregulated market? Over 8000 cryptocurrencies are being traded on the dark web. A majority of these are fraudulent and do not provide any protection to investors. Therefore, recognition of this activity was needed. Most cryptocurrencies are hidden on darknet platforms. These platforms have existed for a while and have been used for selling drugs, weapons, and other illegal activities.
The RAIN suggested countering these challenges by sharing its experience as the first license holder to operate a crypto brokerage and a crypto exchange in the Gulf region. The company has been operating over 80 cryptocurrencies and fulfilling all regulatory requirements.
The stakeholders have already turned down the request for the immediate launching of cryptocurrency and crypto assets, while the international players have been demanding the authorities harness the potential of digital currency.
The director of Public policy at RAIN said to the Pakistani officials that, no country or individual can remain away from the upcoming digital trends and developments, while major businesses, including Starbucks and Emirate Airlines, have started to receive payments in cryptocurrencies. On the other hand, India has also imposed a 31 percent tax on profits from cryptocurrencies.
This was the first time that crypto exchanges have started to get registered with a tax collection body in India, a move that will give legal standing to cryptocurrencies in the country. While the Reserve Bank of India (RBI) had already recognized them as a legal tender in the country, this was the first time that the government was taking a step forward to regulate the crypto exchanges. The guidelines have been published by the blockchain and cryptocurrencies division of India’s revenue department.
Pakistan ranks third in the world in crypto subscriptions and the community in Pakistan is growing rapidly. People are learning more about the crypto world and how it can become a part of their life. Many people around the world have already invested in cryptocurrencies like bitcoin.
There has been a lot of buzz around cryptocurrencies of late and there is a lot of interest in Pakistan as well. However, awareness of the concept is still low and many investors are struggling to make their investment decisions.
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