Pakistan Takes Steps Towards Cryptocurrency Regulation
Pakistan has officially initiated the development of a detailed regulatory framework for digital and virtual assets, marking a pivotal move by the government to oversee the rapidly expanding cryptocurrency sector. This initiative was introduced during a high-profile meeting of the Pakistan Crypto Council (PCC) in Islamabad, presided over by Finance Minister Muhammad Aurangzeb, as reported by The News. The meeting involved key stakeholders in the discussion about the future of cryptocurrencies in the country.
Formation of Technical Committee
A technical committee has been established, comprising representatives from the State Bank of Pakistan (SBP), Securities and Exchange Commission of Pakistan (SECP), and various legal and IT divisions. The committee’s task is to evaluate the proposed laws and develop a comprehensive governance structure aimed at ensuring a secure, transparent, and innovation-friendly regulatory atmosphere for digital assets. This regulatory framework is anticipated to address critical areas such as licensing, compliance, and innovation, thereby safeguarding investors while promoting financial inclusion.
Global Trends and Local Developments
This initiative aligns with a growing global trend towards the regulation of digital assets and coincides with recent developments in Pakistan, including the launch of the nation’s first government-led Strategic Bitcoin Reserve and the introduction of a national Bitcoin wallet. Although cryptocurrencies are not currently regulated in Pakistan, this step demonstrates a clear intention to formalize the sector and embed it within the national financial system.
Emphasis on Balanced Regulation
The council highlighted the importance of a balanced regulatory approach that prioritizes investor protection, transparency, and support for innovation, all while maintaining financial stability. Minister Aurangzeb reiterated the government’s dedication to modernizing the financial sector and emphasized that any forthcoming regulatory framework should enhance inclusion, transparency, and economic resilience.
Clarifications on Cryptocurrency Status
Following recent announcements, including the unveiling of Pakistan’s inaugural strategic Bitcoin reserve at the Bitcoin Vegas 2025 conference in the U.S., the SBP clarified that cryptocurrencies are not outright banned but exist outside the current legal framework. The central bank advised regulated entities, including banks and payment service providers, against engaging with virtual assets due to the lack of legal protections, rather than labeling these assets as illegal. This clarification came after conflicting statements from the government to the National Assembly’s Standing Committee on Finance, which indicated that cryptocurrencies were indeed banned, and warned that individuals involved in cryptocurrency transactions could face scrutiny from the Financial Monitoring Unit (FMU) and the Federal Investigation Agency (FIA).
Concerns Regarding Regulatory Legitimacy
The road to cryptocurrency regulation in Pakistan remains fraught with uncertainty. During a Senate Standing Committee meeting on Information Technology and Telecommunication, members expressed concerns about the legitimacy of the PCC and the absence of parliamentary oversight in its establishment. Some members questioned whether the council could be formed solely through an executive order. The Ministry of IT clarified its limited role in providing input on the council’s terms of reference, while several committee members contended that the Crypto Council should be under the jurisdiction of the Ministry of IT rather than the Finance Division.
