Pakistan and Using Cryptocurrencies to Combat Terrorism
Pakistan is looking into using and legalizing cryptocurrencies in order to combat terrorism. Pakistan has been forced to accept cryptocurrencies in order to combat money laundering and terrorist acts. This support of cryptocurrencies is the result of a suggestion by the Financial Action Task Force (FATF). By accepting cryptocurrencies, Pakistan gains the control of cryptocurrencies in its country and near its borders. Controlling cryptocurrencies inside the country and tracing the activities that are done outside the borders will lead to more control and observing by the government of Pakistan on the security of financial transactions.
Pakistan and Accepting Cryptocurrencies
Accepting cryptocurrencies by Pakistan is considered very positive, but this acceptance is not at all comparable with the progressive moves by countries such as Canada and England in using cryptocurrencies. Prior to this, Pakistan offered a very dangerous infrastructure for terrorist and illegal activities such as money laundering. For this reason, FATF, which is an interstate organization to fight financial corruption and money laundering has warned this country to take actions in order to stop corruption and terrorism. In fact, Pakistan had no choice but to accept cryptocurrencies, and the reason for that was its presence in the FATF black list.
Pakistan Central Bank and Composing Laws for Cryptocurrencies
According to laws and criteria that Pakistan central bank and government will propose for different companies and organizations, any act of infringing laws will lead to their permit being annulled. As a result, any active company in the field of cryptocurrencies should prepare a comprehensive and complete database of transactions with their customers that can be observed by the government.
The fact is that the Blockchain space and cryptocurrencies can be exploited by terrorists and only by official and legal observing from the side of governments can these crimes be controlled. Many cryptocurrencies are created via a process called mining. Each transaction is recorded in the Blockchain infrastructure. Though transaction information is recorded in the Blockchain but no information containing the name of the people, their address and their identity is recorded in the system. For this reason, cryptocurrencies are rather anonymous, and the possibility of exploitation soars in them. According to statistics from 2015 that were provided by Europol, in 40 percent of the cryptocurrency transactions in Europe, there were suspicious and criminal activities.
Reducing Financial Crimes by Proper Regulation
Cryptocurrencies are a very suitable infrastructure for criminal activity. However, this matter will only be able to become under control when countries such as Pakistan compose regulatory laws and use them in the field of cryptocurrencies. In this condition, the free flow of terrorist and criminal transactions on the basis of cryptocurrencies and Blockchain will not continue, and criminals and money laundering projects in the environment and ecosystem of cryptocurrencies will not feel safe.