ISLAMABAD: Pakistan can generate revenue worth at least $90 million (about Rs 19 billion) annually through a 15 percent tax on cryptocurrency trading under strict regulations, industry officials said on Tuesday.

Last year, Pakistan’s total crypto transactions were recorded at $20 billion. Of which the profit obtained was $650 million. “The United States and India are raising billions of dollars through a 30 percent tax on profits made from cryptocurrency trading. We can start with a 15 percent tax,” said Zeeshan Ahmed, General Manager of Country Rain Financial Inc, in a discussion on the role of crypto assets/currency in the economy with journalists.

Ahmed was flanked by Aatiqa Lateef, Director of Public Policy at Rain Financial Inc. It has been observed around the world that regulators initially tend to oppose it, but as the trend gathers momentum, they join the party and put this phenomenon to the test. regulatory regime, Ahmed said.

“We are in constant contact with all regulators including SBP, PTA and FBR and others and we will be ready to help them,” Ahmed said, adding that the government had constituted committees to deliberate on different scenarios and come up with the policy to regularize cryptocurrencies. as an asset or currency.

He said it could take the government 12 to 18 months to make up its mind. “For proper security, crypto transactions should be treated as legal and subject to the following regulations, which may consider prohibiting the conversion of Crypto to a rupees account outside the country. If necessary, they would be willing to accept more regulations to ensure safety,” he added.

He said the biggest challenge was building the initial capacity needed for all regulators. “Crypto is a very new phenomenon and without the necessary due diligence and technical guidance from companies like Rain, it’s difficult for any regulator anywhere to quickly grasp new technologies,” said the IT firm’s country manager.

Aatiqa Lateef Pakistan ranked high among emerging market players in the crypto asset industry as the country held $20 billion worth of crypto in 2020-21.

“Pakistan also stands out among emerging market players in the crypto asset industry and ranks third in Chain Analysis Global Crypto Adoption Index 2021 with market growth of 711 percent between 2020 and 2021” Lateef added. “There have been some investor concerns about the high tax bracket, there have been a lot of positives about regulation of the industry rather than an outright ban.”

Considering the size of the crypto market in India and potential growth, every year there would be a boon to government coffers, Lateef said.

“This tax clarification will encourage investors and companies to operate, as well as move the industry towards a more regulated environment, minimizing bad actors or players.”

He said that India was able to empower the country’s Computer Emergency Response Team (CERT) to police the industry as a clear framework allowed them to control the industry and clarify which authority had the power to curb any suspicious or illicit activity. “This is a boon for both companies and people operating in space,” Lateef said.

The move requires crypto businesses, such as virtual asset service providers, to keep Know Your Customer (KYC) information and financial transaction records for five years to ensure cyber security in the area of ​​payments and markets. for citizens, while protecting their data. fundamental rights and economic freedom in the face of the growth of virtual assets, he concluded.