State Bank of Pakistan pull up PCB over PSL’s crypto currency links


State Bank of Pakistan pull up PCB over PSL’s crypto currency links

by Vijay Tagore • Last updated on Wed, Mar 15, 2023

The State Bank of Pakistan (SBP), the country’s central bank that monitors all other banks, has taken objection to Pakistan Cricket Board’s (PCB) association with a couple of sponsors, directly and indirectly, for the Pakistan Super League (PSL). The banking regulator has said the association with a crypto currency unit is a contradiction of the national stand on virtual currencies.

In a letter addressed to Salman Naseer, the chief operating officer (COO) of the PCB, a senior official of the SBP said the sponsorship deal with crypto currency would entice viewers of Pakistan to enter into the prohibited domain of Crypto/virtual currencies.

“It has been observed that PCB has engaged Best Fintech Investment Coin (BFIC) as ‘Official Technology Partner’ of PSL Season 8. We would like to highlight that BFIC is a crypto currency and in terms SBP’s BPRD circular No 33, dated April 6, 2018, all Banks/DFIs/Microfinance Banks and Payment System Operators/Payment Service Providers have been prohibited from dealing in/promoting virtual currencies.

“This represents the regulatory stance of SBP on crypto currencies/virtual assets. Therefore, promoting a crypto currency through the event of PSL 8 would not only contradict the aforesaid stance but would entice the viewers of Pakistan to enter the prohibited domain of crypto/virtual currencies,” said a letter written by Yaser Arafat, Senior Joint Director of SBP on March 8. The letter has been copied to the secretary, Ministry of Inter-Provincial Coordination, Islamabad, and the secretary of ministry of finance (sic).”

The regulating bank has also taken serious note of Karachi Kings having a sponsor which, it said, is a surrogate brand for a sports betting website, which are prohibited in the country.

“Similarly, it has been observed that a prominent franchise of PSL season 8, namely Karachi Kings has signed 1XBAT as Titanium Sponsor. We would like to highlight that 1XBAT appears to be a surrogate brand of a sports betting website, I,e, 1XBET which allows the users to bet on a wide variety of popular sports such as cricket, football, basketball, volleyball, etc (sic),” the letter said.

Further the letter said, “Apparently both these websites/domains are foreign controlled and thus any usage of their services by residents of Pakistan would result in outflow of precious foreign exchange of the country. Since, neither these entities, nor PCB has obtained any permission from SBP to take out of Pakistan any money earned by them from resident Pakistanis, any transfer of funds from their operations in Pakistan will be in violation of Foreign Exchange Regulation ACT, 1974 (sic).”

The SBP signed off the letter with an advisory which read, “In view of the foregoing, PCB is requested to ensure that these platforms do not offer any service in Pakistan, which will result in outflow of funds from Pakistan (even through informal channels). Besides, PCB is also requested to devise a code of ethics for its franchises. Obligating them to abide by the laws of the land while selecting international sponsors (sic).”

When reached out for a comment, Karachi Kings owner Salman Iqbal told Cricbuzz that the SBP’s objections are not tenable. “In response to your queries as to whether I have any association with 1XBAT and regarding the objections of the State Bank of Pakistan on that, I would like to clarify that I do not have any association or affiliation with the 1XBAT or 1XBET website and, therefore, the objections of the State Bank of Pakistan are not tenable. Plus one of the Karachi Kings sponsors was 1XBAT not 1XBET,” he said.

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