- The State Bank of Pakistan reflects on the evolving regulatory attitudes toward cryptocurrency integration.
- While embracing innovation, the SBP maintains vigilance over potential risks tied to digital assets.
In its 2022 financial stability report, the State Bank of Pakistan [SBP] recognized the emerging significance of Ripple and its digital asset XRP in the realm of global payments. The SBP described this development as “promising work,” particularly in the context of cross-border transactions.
The acknowledgment surely reflects the evolving cryptocurrency dynamics and its integration into mainstream finance. However, the report also underscores SBP’s cautious approach and concerns over potential risks associated with digital assets.
State Bank of Pakistan recognizes XRP’s role in cross-border transactions
The SBP’s recognition of Ripple and XRP’s role in facilitating cross-border payments comes amid the broader adoption of cryptocurrencies in traditional financial systems. The acknowledgment signals an increased acceptance of the changing financial landscape by regulatory institutions.
However, the SBP remains vigilant about the potential exploitation for money laundering and terrorist financing. It referenced infamous cases like the Silk Road dark web marketplace and the volatile nature of the crypto industry. These included instances such as the collapse of the FTX crypto exchange and Terraform Labs’ projects.
Notably, the SBP’s positive recognition of XRP’s capabilities was significant. This was the case given that the institution didn’t endorse any cryptocurrency in the past.
While the SBP acknowledged the potential benefits of cryptocurrencies like XRP, it remains mindful of the inherent risks they entail. The report’s stance reflected a balance between embracing innovation and safeguarding financial systems from potential threats. This approach resonates in a landscape where cryptocurrencies are gradually being integrated into mainstream financial discussions.
Contrasting with the SBP’s cautious stance, the global cryptocurrency market witnessed the rapid ascent of stablecoins. A recent study revealed that stablecoins have remarkably gained market share throughout 2022.
The report highlights that over $11 trillion worth of transactions were settled via stablecoins on-chain. This volume has even surpassed the payment volumes of PayPal and reached a substantial percentage of the volumes processed by Visa.
The traction of stablecoins underscores the increasing mainstream acceptance of digital assets in various financial operations.
Interesting report on stablecoins, which settled $11 trillion on-chain in 2022, 8x more than PayPal’s payment volume
20 million addresses hold between $1 and $100 of stables, indicating a significant amount of small “checking account” usage globallyhttps://t.co/FDhByrgpZe pic.twitter.com/lBFUOQmauH
— Alex Gladstein 🌋 ⚡ (@gladstein) August 23, 2023
At press time, XRP exchanged hands at $0.5169, indicating a decline from the peaks achieved amid Ripple’s legal battles with the US Securities and Exchange Commission (SEC).