2018, the year of regulation. When some countries – like Malta or Switzerland – adopt a flexible regulation to catalyze creation in the crypto space, others, such as Pakistan or Iran , preach in favor of the total ban . But are repressive measures of the kind only effective?
Some time ago, the State Bank of Pakistan (SBP) issued a circular urging all banks, microfinance entities, payment system operators and service providers to refrain from approaching by far cryptocurrencies. The use, trade, exchange, ownership and investment in digital currencies are all questioned. The circular went so far as to state that even at the level of citizens, anyone contravening these new provisions would be prosecuted . This news came soon after the introduction of similar measures in India .
If it is not a law in the strict sense, this circular has had a resounding effect. Urdubit, Pakistan’s “first exchange bitcoin”, announced immediately after the circulation of this circular that its customers should withdraw their funds as quickly as possible from the platform , and was effectively shutting down less than a month later.
Yet, despite the government’s efforts, digital currency trading is far from dead in Pakistan . Indeed, there are always alternatives to exchange your Bitcoins. LocalBitcoins , for example, is one of the most used peer-to-peer exchange platforms. Until recently, it was possible to register without revealing its identity – which is likely to evolve soon – and proceed to exchanges of peer-to-peer and “OTC” for Over The Counter. This means that the cryptoactives are exchanged outside an exchange platform and they are not visible on a traditional order book .
As shown in the graph below, following repressive measures initiated by the SPB in April, the volume of BTC traded in Pakistan rupee collapsed. But this decline will have been only temporary, and we find volumes traded close to those of February-March.
It is also interesting to note that as a result of these bans, the total capitalization of Pakcoin (PAK) – the most popular cryptocurrency in Pakistan – has risen from about $ 200,000 to $ 347,000, reaching almost $ 500,000. $ a week ago.
It can not be repeated enough: Bitcoin is not censurable . We can not prevent people from using it and exchanging it. It is possible to complicate the exchanges, certainly, but it seems that each time a government attacks the cryptocurrencies, it only increases the interest of the general public for the latter.