Governor of the Central Bank of Pakistan on cryptocurrencies: “The potential risks far outweigh the benefits”

The state needs more time to fully understand these technologies, not just in terms of risk response

20.02.2022 - 07:00

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What’s new? The Pakistani Central Bank Governor, Reza Baqir, stated that the risks associated with cryptocurrencies far outweigh the benefits. However, he noted that if solutions that address these potential risks emerge, the central bank is willing to consider them. In a speech at the 2022 MASIC Annual Investment Forum, Baqir announced the Central Bank’s findings, which he said are similar to those that large emerging markets have come to.

Speech at the 2022 MASIC Forum

What does the Central Bank Governor say? Baqir cited some of the risks associated with cryptocurrencies and how they make digital assets not ideal for developing economies. The Central Bank Governor said that Pakistan, like other countries that have banned or restricted the use of cryptocurrencies, needs more time to fully understand these technologies not just in terms of risk response. He said:

“First, in their current form, private digital currencies are mostly speculative in nature and have not provided any robust use case and real economic benefits, especially to underdeveloped countries like Pakistan.”

What is Baqir’s stance on the launch of CBDC? Despite the arguments against cryptocurrencies, the Central Bank Governor has expressed his thoughts on central bank digital currencies (CBDCs). These, he said, are being studied by the regulator from both technological and functional perspectives. Baqir stated that the process should not be driven only by a desire to offer an alternative to private digital currencies or fear of them.

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