This is the only province in the country that gives legal support to Bitcoin. The Pakistan Securities and Exchange Commission is studying the legal framework for cryptocurrencies.
In recent days, the government of Khyber Pakhtunkhwa announced that it will finance the construction of two Bitcoin (BTC) mining farms. This is one of the four provinces of Pakistan and the only one that supports Bitcoin.
The Information Technology adviser and legislator of the province, Ziaullah Bangash, said that the provincial government approved a new law. The document allows the release of funds to establish mining farms, according to local media.
The farms aim to use the potential profits from mining and Bitcoin trading to help the local economy, said Bangash. However, he did not provide details on government investments or plans in that regard.
According to the legislator, the issuance of No Objection Certificates (NOC) for companies and people interested in this area received approval. Through the certificate, users can launch or issue their cryptocurrencies, without fearing any type of legal reaction. “Pakistan should not remain behind in the field of cryptocurrency mining. There are currently 11 million BTC in circulation in the world, with a 90% daily increase,” said Bangash. The legislator could have referred to bitcoins effectively in the market, given that the amount already issued is greater than 18 million BTC.
Khyber Pakhtunkhwa Should Serve as an Example
The official said that the step that the government of Khyber Pakhtunkhwa took will encourage other provinces. The decision of the authorities is in line with the resolution that the regional legislative assembly approved last December. They unanimously legalized cryptocurrencies and Bitcoin mining.
Pakistan is a country that has not been open to Bitcoin and other cryptocurrencies. That has led Bangash himself to send Twitter messages to the central government. In that way, he seeks to persuade them to consider the proposal to legalize cryptocurrencies in the rest of the country.
In April 2019, the government of Pakistan decided to regulate the ecosystem of cryptocurrencies in the Asian nation. They would do that through a plan by the Financial Action Group to combat terrorism.
In November 2020, the Securities and Exchange Commission of Pakistan presented a crypto asset regulation consultation document. It collects experiences from different nations of the world regarding how they treat cryptocurrencies. “Virtual assets are the beginning of a new digital age. Financing and demanding measures with innovative approaches by regulators worldwide would be possible only through the beginning of a new era,” says the document.
Power Failures are an Obstacle for Bitcoin
Everyone knows that cryptocurrency mining requires high energy consumption to operate the machines. However, the province of Khyber Pakhtunkhwa seems to lack the necessary infrastructure.
The central government said that Pakistan recently suffered a general blackout due to “technical failures”, according to The Financial Times. This is not the first time that a country with serious economic problems has used Bitcoin to obtain economic resources. The governments of Venezuela and Iran have also openly used this initiative.
By Alexander Salazar