Pakistan’s central bank on Friday revoked the in-principle and pilot functions acceptance of Tag to function as an digital money establishment in a transfer that poses existential danger to the agency.
Point out Lender of Pakistan said in an buy that it is revoking Tag’s approval to run as an digital money institution, the authorization that is required for entities to offer you progressive, user-helpful and expense effective minimal-value electronic payments devices these as wallets, playing cards and contactless payments. The central lender has also ordered the startup to close all customers’ wallet accounts and pull its applications from the application suppliers with rapid influence.
The central bank’s action is in response to Tag violating regulatory prerequisites and “other concerns” that emerged during the pilot operations of the company, it claimed. The choice has been taken to “protect the desire of the general public at massive,” it extra.
The regulatory motion follows a months-prolonged probe into Tag, which features banking and financial products and services this sort of as contactless payment, cards and wallets to end users in Pakistan.
The startup has been accused of forging files to the central bank, according to an before investor letter received by TechCrunch. The central lender requested Tag in August to “immediately” refund all funds of clients.
Tag is one particular of the swiftest growing startups in Pakistan. It was valued at $100 million in its seed funding spherical in September past calendar year. The startup counts Liberty City Ventures, Canaan Companions, Y Combinator, Addition and Mantis amongst its backers.
The State Lender of Pakistan did not instantly reply to a request for comment by way of cellular phone and e-mail.
Friday’s motion is an additional blow to the nascent but quick developing startup ecosystem in Pakistan, which clocked history funding very last 12 months. Airlift, once the most valuable startup in the South Asian industry, shut down in July this yr immediately after it unsuccessful to safe new funding.
Tag’s main government could not be promptly arrived at for comment. The startup will take a look at interesting the State Bank’s conclusion, a supply with direct expertise of the subject explained to TechCrunch.