In an email, the Financial Action Task Force (FATF), after Pakistan’s Finance Minister reportedly claimed that the global money-laundering watchdog had set this condition for South Asia nation, said it “does not require countries to ban virtual assets or virtual asset service providers indiscriminately.”

a local news outlet reported on May 17, that Aisha Ghaus Pasha, the country’s Minister for State Finance and Revenue had stated that the FATF has set a condition to prevent Pakistan from being added to its “greylist” of countries that are under greater monitoring. Another report said that Pakistan’s anti crypto stance was because it went against the FATF conditions.

Local media reported on Thursday that Pasha said cryptocurrencies “will never be legalized in Pakistan”.

The “grey list”, compiled by the FATF, is seen as an admonition to correct strategic weaknesses in anti-money laundering and counter-terrorist financing regimes.

Pasha’s statement was interpreted as a new ban by Pakistan’s Government, even though the economy of Pakistan is in turmoil, partly because of a volatile political environment. Pasha reportedly also told authorities to begin work on banning cryptocurrency.

CoinDesk reports that the central bank of the country declared its intention to ban crypto in January 2022. This is the first time the central bank has made a clear statement about the new financial technology.

The FATF stated that it expects countries to be aware of the money laundering and terrorist funding risks crypto-currencies face and to issue licenses and register exchanges in order to monitor the sector the same as it does other financial institutions.

The FATF mandates that virtual asset services adhere to the same preventive steps as financial institutions. This includes customer due diligence, recording and reporting suspicious transactions and adhering to its Travel Rule, which requires crypto service provider to collect and share data on transactions exceeding a certain threshold.

The FATF refused to directly reply to Pasha’s statements, but stated that “countries may, but are not required to, prohibit virtual assets and virtual service providers.”

CoinDesk contacted the Pakistani finance ministry as well as the Ministry of Foreign Affairs to get their comments.

Read more: Pakistan Announces a Fresh Ban on Crypto but Adoption As A Hedge Remains Popular

Sandali Handagama is the editor.