The State Bank of Pakistan (SBP) has linked digital assets to the country’s long-standing foreign exchange regulations, making it clear that restrictions under the Foreign Exchange Regulation Act (FERA) will extend to transactions involving cryptocurrencies and related digital assets. This includes the maximum outbound transfer limit of $100,000 annually by an individual.
The announcement was made as SBP Acting Deputy Governor Dr Inayat Hussain briefed the Senate Standing Committee on Finance. He explained that while the central bank is working on issuing a digital currency for asset trading, such a move will only be possible once the Pakistan Virtual Assets Regulatory Authority (PVARA) Bill is passed and necessary amendments are made to the SBP Act.
The committee, chaired by PPP Senator Saleem Mandviwalla, began clause-by-clause discussions on the PVARA Bill. The proposed law is intended to provide permanent legal cover to the framework initially introduced through a presidential ordinance. However, experts from the Ministry of Law and Justice highlighted implementation challenges. Legal consultant Shehroz Bakhtiyar cautioned that FERA, in its current form, cannot be directly applied to digital assets, and amendments will be needed.
Lawmakers echoed the difficulty of monitoring digital transfers, given their decentralized nature. PML-N Senator Afnanullah Khan stressed that with Pakistanis already investing more than $21 billion in digital assets, it is critical to establish a legal framework to regulate the sector. While Bakhtiyar emphasized that licensed service providers would be obligated to enforce the $100,000 limit, he admitted that enforcement would be complex in practice.
SBP officials confirmed that once a central bank digital currency (CBDC) is launched, it will be valued on par with the rupee, allowing account holders to manage both conventional and digital rupees within the same bank account. Commercial banks would be consulted on their digital asset requirements, while customers would retain the option of receiving payments in either rupees or digital rupees.
Lawmakers emphasized that the CBDC should remain under SBP’s control rather than PVARA’s. Senator Afnanullah Khan called it the “gold standard” for digital finance. On a proposal by Senator Anusha Rahman, the committee agreed on an upper age limit of 55 years for the appointment of PVARA’s chairperson, with a requirement of at least five years’ experience in digital finance and technology.
SBP reiterated its cautious stance, confirming that existing restrictions on banks and dealers dealing with cryptocurrencies will remain until the new law is finalized. The regulator reminded lawmakers that its 2018 circular had already declared trading in cryptocurrencies such as Bitcoin, Litecoin, Pakcoin, and others illegal, requiring banks to report such dealings to the Financial Monitoring Unit.
Law Secretary Raja Naeem Akbar assured the committee that frameworks like FERA, FATF recommendations, and the Anti-Money Laundering Act would all be applied to ensure the regime remains robust. He added that foreign companies such as Binance would be required to establish offices in Pakistan, where FERA provisions would also apply.
The committee discussed placing PVARA under the administrative control of the finance ministry instead of the Cabinet Division, believing it would strengthen the authority. Under the proposed law, virtual asset service providers would be licensed to operate in nine areas including brokerage, custody, exchanges, lending, derivatives, asset management, transfer and settlement, fiat-referenced token issuance, and advisory services.
The government, SBP, and legislators agreed that while Pakistan cannot ignore the scale of its citizens’ participation in digital assets, any new regime must balance innovation with economic stability and compliance with international obligations.
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