The Federal Board of Revenue (FBR) has officially started consultations with experts to prepare legislation for cryptocurrency regulation in Pakistan. Acting on the directives of the Federal Tax Ombudsman (FTO), the FBR is exploring ways to legally introduce and tax digital currencies, marking an important step toward formalizing the country’s rapidly growing cryptocurrency sector.
According to official communication, the move follows a complaint lodged with the FTO requesting the FBR to clarify its tax policy on cryptocurrency. The FTO highlighted the scale of digital currency adoption in Pakistan, noting that there are currently nine million cryptocurrency users in the country out of an estimated 560 million worldwide. Pakistan ranks as the sixth-largest country in terms of cryptocurrency adoption, reflecting its growing relevance in the digital economy.
The consultations aim to establish a structured legal framework that defines taxation rules on profits and assets generated through cryptocurrency transactions. This initiative also seeks to address gaps in the existing tax regime, as large-scale crypto transactions are currently taking place outside formal financial oversight. The FTO stressed that this lack of regulation reflects institutional inattention and must be addressed to prevent revenue losses and potential misuse of the channel.
The State Bank of Pakistan (SBP) has already shown a willingness to support legal recognition of digital currencies. While its 2018 circular on the risks associated with virtual currencies did not declare them illegal, it highlighted potential risks and the need for proper regulation. With crypto assets continuing to grow in popularity, both among individual investors and institutions, regulatory clarity has become increasingly important.
International best practices also support stronger oversight. Under frameworks such as the Financial Crimes Enforcement Network (FinCEN) in the United States, crypto miners and related actors are treated as money transmitters and subject to financial regulations. Similar approaches are being considered globally to ensure transparency, reduce risks, and bring crypto markets under legal supervision.
The FTO emphasized that profits and assets generated through cryptocurrency dealings remain undocumented and untaxed without proper legislation. Introducing clear tax laws and regulations could help the government expand its tax base and address revenue constraints. This is particularly relevant as Pakistan seeks to strengthen fiscal discipline and align with global financial standards.
The Policy Wing of the FBR has acknowledged the technical nature of the matter and confirmed that consultations with subject matter experts are underway. The focus is on developing a comprehensive legal structure that can be incorporated into the upcoming Finance Bill.
Earlier, the FBR was advised to take into account the concerns of all stakeholders, including the complainant, and ensure that cryptocurrency is regulated in a way that promotes transparency while capturing potential tax revenues. Experts believe that well-defined rules could boost investor confidence, bring crypto activity under financial scrutiny, and provide clarity for businesses entering the digital asset space.
Once enacted, the legislation on cryptocurrency is expected to broaden the tax net, introduce compliance measures, and regulate a rapidly expanding segment of Pakistan’s financial ecosystem. This move could position the country more strategically in the global digital economy while addressing concerns about revenue leakage and financial security.
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