It’s been a busy turn of the year for governments and crypto regulators. Late last year, the Bank of England poured cold water on the crypto markets talking of the need for a global regulatory framework. The UK’s central bank’s primary concern was the risk that crypto assets pose to UK financial stability.
Since the release of the Bank of England’s Financial Stability Report, the crypto news wires have been flooded with regulatory chatter.
Earlier this week, news had hit the wires of India’s RBI creating a new FINTECH division. While there was no outright ban on cryptos, the RBI is looking to step up its regulatory oversight of the domestic crypto market. At the start of the year, we had reported the RBI investigating a number of crypto exchanges on suspicion of tax evasion. One of the exchanges had been Binance-owned (BNB) WazirX.
For Binance, it wasn’t the first time to face questions from regulators. With the lack of a global regulatory framework, it is unlikely to be the last. In 2021, news had hit the wires of Binance withdrawing its Singapore application for failing to meet MAS requirements. Following this, there was also news of Binance falling afoul of the Ontario Securities Commission.
In spite of the regulatory hurdles, news continues to hit the wires of Binance ramping up its compliance division to work with regulators, with the vision of becoming an industry leader in the crypto space.
Removing any doubts over what lies ahead, even the IMF called for the need of a global regulatory framework. At this juncture, even crypto exchanges may welcome it…
Pakistan and the Crypto Ban
Following the RBI’s recent activity in the crypto space, Pakistan’s central bank has reportedly banned cryptos. For Bitcoin (BTC) mining, this is certainly a non-issue. According to the University of Cambridge, Pakistan had accounted for 0% of Bitcoin’s global hash rate, alongside Mainland China. India’s percentage of Bitcoin’s hashrate had stood at just 0.05%.
In terms of cryptocurrency adoption, however, there’s likely to be a greater market impact. According to Chainalysis, worldwide adoption jumped over 880% in 2021. The top 3 countries in their 2021 Global Crypto Adoption index were Vietnam, India, and Pakistan. It was P2P exchange trade volume that supported Pakistan’s #3 ranking. By contrast, India ranked 72nd in the category.
Pakistan and the Binance Connection
When considering Pakistan’s decision to ban cryptos and Pakistan’s ranking within the Index for P2P exchange trade volume, it’s unsurprising that crypto exchanges have come into focus.
Today’s news also announced that the State Bank of Pakistan has launched an investigation into Binance and OctaFX. While Binance may now have the depth of experience needed within its compliance division to tackle regulatory issues, the ban in Pakistan will be troubling.