Sunday, November 28, 2021

SECP considers regulating virtual assets worth over €7 billion worldwide

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ISLAMABAD: Securities and Exchange Commission (SECP) of Pakistan has published on Wednesday an outline of digital assets to seek proposals for regulating the new market as it enters  “a new era” of Digital Finance, ARY News reported.

The company and asset regulator seeks to welcome consultations from stakeholders and masses over regulating the nascent market of crypto assets.

In its position paper today, SECP acknowledges how critical it is to formulate regulatory measures for the virtual industry “as they are known to the regulators globally today”.

According to the regulatory watchdog, a virtual asset is a digital representation of value that can be digitally traded, or transferred, and can be used for payment or investment purposes.

It said that even though the full scale of misuse of virtual currencies, provided the reluctance to regulate it, is unknown; however, its market value has been reported to exceed €7 billion worldwide.

Having compared the proposed framework for crypto assets in other countries in this regard, SECP is of the view that regulating this regime of digital finance will hike capacity in financial markets while allowing more liquidity flow in secondary markets of the country.

READ: Nearly $2 trillion traded on COVID-19 vaccine news

SECP noted in its position paper that regulators worldwide while realizing the potential of digital assets and the uncertainty around them, need to start assessing the risk associated with digital assets as well.

It said whatever innovation it can bring to the financial sector can only be assessed if regulatory frameworks to protect investors and make larger financial inclusion a possibility, are in place.

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