For much of the past decade, Pakistan’s relationship with cryptocurrency has been defined by hesitation and fear. In 2018, the State Bank of Pakistan (SBP) took the dramatic step of banning banks and financial institutions from dealing in virtual currencies. The directive was sweeping and left little room for interpretation. Digital tokens, it declared, were volatile, unregulated, and potentially destabilizing for an economy already struggling with debt, inflation, and fiscal instability. By cutting off access to crypto through official channels, the government hoped to prevent illicit flows and shield ordinary citizens from speculative losses.
The policy was effective in tightening control, but it also placed Pakistan on the margins of a global financial shift. Around the world, countries were experimenting with blockchain solutions, creating regulatory sandboxes, and even rolling out central bank digital currencies. Pakistan, by contrast, had chosen to sit out the experiment. Yet the story did not end there. By 2025, the very same nation that once treated cryptocurrency as a threat is now treating it as a strategic opportunity. This change is not a simple reversal but a complex evolution shaped by global pressures, domestic realities, and a growing recognition that digital assets could play a transformative role in Pakistan’s economic future.
From Blanket Ban to Underground Adoption
When the ban was first announced, it was met with frustration from Pakistan’s growing community of freelancers, tech enthusiasts, and small investors. For freelancers in particular, the prohibition was especially painful. Pakistan is home to one of the world’s largest populations of online gig workers, many of whom rely on platforms that increasingly experiment with crypto-based payments. Digital tokens had become a way to bypass expensive banking channels and receive payments instantly from clients abroad. The ban closed off these possibilities, forcing freelancers to turn back to costly and time-consuming alternatives.
At the grassroots level, however, cryptocurrency did not disappear. Peer-to-peer networks and informal exchanges grew rapidly. Pakistan emerged as one of the top countries in the world for Bitcoin trading volumes on peer-to-peer platforms, even though the activity was technically illegal. Ordinary citizens, seeking to protect their savings against a weakening rupee, began experimenting with stablecoins and digital wallets. For many, the attraction was not speculation but survival. Digital currencies provided a way to hedge against inflation and to transact outside the constraints of a fragile financial system.
The persistence of these underground networks revealed an important truth: prohibition was not eliminating demand. It was only pushing it out of sight, where it was harder to regulate and tax
Global Shifts and Domestic Pressures
Meanwhile, the global financial environment was changing. Cryptocurrencies were no longer seen merely as tools for speculation; they were being integrated into mainstream financial systems. Major companies accepted digital payments, investment firms launched blockchain-focused funds, and central banks explored their own digital currencies. International pressure mounted for countries to create regulatory frameworks that could accommodate progress while preventing illicit activity.
Domestically, Pakistan faced pressing economic challenges that made change more attractive. The country’s trade deficit continued to widen, reliance on remittances grew heavier, and inflation eroded household incomes. The unbanked population remained massive, leaving millions without access to formal financial services. Policymakers began to reconsider whether digital assets might offer solutions to problems that traditional finance had failed to address. Freelancers lobbied for easier access to crypto payments. Entrepreneurs argued that blockchain technology could streamline supply chains, reduce corruption, and attract foreign investment. Even within government circles, voices grew louder calling for a reassessment of the blanket ban.
By the mid-2020s, the tide had turned. The question was no longer whether Pakistan should engage with cryptocurrency, but how it could do so responsibly.
Mining Ambitions: Turning Energy into Digital Wealth
One of the boldest steps in Pakistan’s crypto journey has been its embrace of cryptocurrency mining. Mining, the energy-intensive process of validating transactions and securing blockchain networks, had long been dominated by countries with cheap power and advanced infrastructure. Pakistan, with its mix of hydropower and underutilized renewable energy potential, realized it could enter the field with a comparative advantage.
In 2025, officials announced plans to explore mining on a national scale. This was not about individuals plugging in computers in their basements; it was about building industrial-scale mining farms capable of competing internationally. The vision was to turn energy resources into digital wealth, creating new streams of revenue while positioning Pakistan as a regional leader in blockchain-based industries.
Supporters of the initiative argue that mining could help diversify the economy at a time when traditional industries are under stress. Textile exports, once the pride of the economy, struggle to remain competitive in global markets. Remittances, though vital, leave the country vulnerable to global downturns. Mining, by contrast, offers a chance to generate value from resources already within Pakistan’s control. The potential to attract foreign investment into this new sector has also sparked excitement among policymakers eager to bring in capital without deepening debt dependency.
The challenges are real. Energy shortages remain a chronic issue in Pakistan, with load-shedding still a reality in many regions. Critics question whether dedicating electricity to mining is defensible when households and factories face outages. Environmental concerns also loom large, given the global criticism of crypto mining’s carbon footprint. Pakistan’s ability to power its mining projects with renewables rather than fossil fuels will determine whether the initiative can be sustained without backlash.
Building Institutions for a Digital Future
Perhaps the most important transformation in Pakistan’s crypto story has been the shift from prohibition to regulation. In 2025, the government established the Pakistan Digital Asset Authority, a body tasked with overseeing the cryptocurrency sector. Its mandate is to regulate, supervise, and promote digital assets while ensuring alignment with international financial standards.
The creation of this authority signals a recognition that digital assets are here to stay. Rather than resisting them, Pakistan is now seeking to manage them responsibly. The authority is expected to license exchanges, set standards for digital wallets, monitor compliance with anti-money laundering laws, and protect consumers from fraud. Its very existence reflects a new philosophy of governance: regulation, not restriction.
Complementing the authority is the Pakistan Crypto Council, a forum designed to encourage dialogue between government officials, industry leaders, and technology experts. By bringing diverse voices to the table, the council ensures that policy decisions are informed by both economic realities and technological knowledge. These institutions together mark a turning point. Pakistan is no longer treating crypto as an outlaw sector but as an emerging industry that requires careful management.
Opportunities for Transformation
The shift toward regulation carries with it enormous opportunities. Financial inclusion is one of the most significant. With millions of Pakistanis excluded from formal banking, digital assets could offer an accessible gateway to savings, credit, and payments. Mobile wallets powered by blockchain could reach people in remote areas who have never held a bank account.
The country’s freelancer community also stands to benefit greatly. For years, gig workers have struggled with delays and high costs when receiving payments through international banking systems. The ability to use stablecoins or other digital currencies could streamline their income flows, making Pakistan’s already dynamic freelancer market even more competitive globally.
Foreign investment is another area of potential growth. By creating a clear regulatory framework and encouraging projects like mining farms, Pakistan can attract international investors looking for emerging markets with crypto-friendly policies. This investment would not only bring in capital but also transfer technical expertise and create jobs.
On a broader level, embracing crypto provides Pakistan with an avenue to diversify its economy. At a time when dependence on textiles and remittances leaves the country vulnerable, digital assets offer a chance to expand into new industries. Mining, blockchain-based services, fintech startups, and even potential collaborations with global tech firms could all become engines of growth.
Risks and Challenges Ahead
Yet it would be naïve to imagine the road ahead will be smooth. The risks remain significant and must be handled carefully. Energy shortages could undermine mining ambitions if not managed wisely. Allocating electricity to mining while ordinary citizens suffer blackouts would generate political backlash.
Cryptocurrencies remain notoriously volatile. A sudden crash in global markets could wipe out gains overnight, leaving investors and perhaps even the state exposed. This is especially concerning in a country where economic shocks are already frequent and destabilizing.
There is also the ever-present risk of illicit finance. Without strict oversight, digital assets can be used for money laundering, tax evasion, or funding illegal activities. Pakistan, which has worked hard to avoid being blacklisted by global financial watchdogs, cannot afford lapses in this area.
Finally, regulation itself is a double-edged sword. Too much control could slow growth and drive talent abroad, while too little could create chaos and mistrust. Striking the right balance will require constant adjustment, openness to feedback, and an ability to learn from global best practices.
A Nation Steps into the Digital Era
Pakistan’s journey with cryptocurrency is a story of remarkable change. From the rigid prohibition of 2018 to the ambitious reforms of 2025, the country has traveled a long distance in a short span. The shift reflects both necessity and vision: necessity, because ignoring digital assets was proving impossible, and vision, because policymakers now see crypto as a tool for resilience and economic strength.
By building institutions, exploring mining, and encouraging dialogue, Pakistan has taken its first steps into a future where digital assets are part of the economic mainstream. The risks are serious, from energy shortages to regulatory missteps, but so are the opportunities. If managed with care, crypto could help Pakistan diversify its economy, empower its citizens, and carve out a role in the global financial system.
This transformation is not only about adopting a new technology. It is about redefining the nation’s place in the global economy. By choosing to engage with crypto, Pakistan is making a calculated bet that regulation and responsibility can turn digital assets into a foundation for stability and growth. Whether this approach succeeds will depend on the choices made in the years ahead, but one thing is certain: Pakistan is no longer on the sidelines of the digital revolution. It has stepped forward, determined to shape its future.