In a move that highlights Pakistan’s cautious yet evolving stance on digital assets, the State Bank of Pakistan (SBP) has clarified its position regarding virtual assets (VAs) in response to public attention on discussions during the 14th meeting of the National Assembly’s Standing Committee on Finance and Revenue.
According to the SBP, its directive issued in 2018 advising regulated entities to refrain from engaging with virtual assets was not a declaration of their illegality in the country. Rather, the decision stemmed from the lack of a comprehensive legal and regulatory framework at the time. The advisory applied to all SBP-regulated institutions including banks, Development Finance Institutions (DFIs), Microfinance Banks (MFBs), Electronic Money Institutions (EMIs), Payment System Operators (PSOs), Payment Service Providers (PSPs), and Exchange Companies.
The central bank’s decision was rooted in the aim to shield both financial institutions and consumers from potential risks associated with unregulated virtual asset transactions. These risks include fraud, money laundering, cybersecurity threats, and the volatility often inherent in virtual asset markets. By discouraging involvement in VAs, the SBP sought to maintain financial stability and protect consumer interests in the absence of a supportive legal framework.
However, the current trajectory suggests a shift in approach. The SBP, in collaboration with the Finance Division, is now actively engaged with the Pakistan Crypto Council—a body constituted by the Federal Government—to devise a legal and regulatory framework tailored to the local context. This initiative signifies a potential opening for virtual assets to gain legal recognition in Pakistan, provided they operate within an established regulatory environment.
The development of this framework is expected to offer much-needed legal clarity and protections for consumers and investors. It reflects the government’s growing recognition of the role that virtual assets and blockchain technology could play in the country’s digital finance landscape. Ensuring regulatory clarity is likely to encourage innovation, improve investor confidence, and align Pakistan with global trends in financial technology.
While the SBP’s 2018 advisory remains in place for now, the ongoing efforts indicate that a regulated future for virtual assets in Pakistan is being seriously considered. The move could pave the way for fintech innovation and increased digital financial inclusion, particularly if the upcoming framework addresses security, anti-money laundering (AML) measures, and investor education.
As global interest in virtual assets continues to grow, Pakistan’s evolving policy response is being closely watched by industry stakeholders. The collaboration between key financial authorities and the Pakistan Crypto Council may mark a significant step forward in integrating blockchain-based assets into the formal financial ecosystem—albeit under a regulatory umbrella that prioritizes stability and protection.
In summary, virtual assets are not illegal in Pakistan, but they are currently unregulated. The authorities’ engagement with stakeholders to create a legal framework suggests a proactive approach toward eventually embracing these digital innovations responsibly.