The Senate Standing Committee on Finance, chaired by Senator Saleem Mandviwalla, convened to review the Virtual Assets Bill 2025, sparking a detailed debate on the regulation, taxation, and misuse of cryptocurrencies in Pakistan. Lawmakers emphasized the need for a balanced approach that recognizes both the opportunities and risks associated with virtual assets in a rapidly digitizing economy.
During the session, Senator Mandviwalla underscored that Pakistan has become one of the top global markets for cryptocurrency adoption, ranking 8th worldwide in investment. However, he warned that most crypto-related transactions are currently funneled through informal channels such as hawala and hundi, which remain illegal under Pakistani law. He stressed that the absence of oversight creates loopholes for financial crime and urged swift regulation to prevent misuse.
Senator Mohsin Aziz raised concerns over the use of cryptocurrencies in criminal activities, particularly in kidnapping-for-ransom cases. He stated that in several incidents, perpetrators demanded ransom in crypto instead of traditional cash payments, highlighting the growing risks associated with unregulated digital assets.
Representatives from the State Bank of Pakistan (SBP) explained that crypto exists in a legal “grey area” in the country, though the central bank has issued advisories to caution the public. SBP Deputy Governor noted that while Pakistani youth have developed expertise in crypto trading, the lack of formal regulation increases exposure to fraud, financial instability, and illicit activities.
The Ministry of Law informed the committee that the Virtual Assets Bill 2025 includes the establishment of an independent regulatory board. This body would comprise specialists in technology, finance, and governance to ensure effective oversight. Senator Mandviwalla stressed that eligibility requirements for board members must be clearly defined in the legislation itself rather than being deferred to later rulemaking.
Finance Secretary Imdadullah Bosal highlighted that, historically, Pakistan had no formal framework to govern virtual assets, but the proposed bill aims to bring transparency and enforce safeguards against misuse. He also acknowledged that the legislation would evaluate whether cryptocurrencies are contributing to money laundering and illicit transfers.
Taxation emerged as another focal point of the discussion. Senator Dilawar Khan suggested introducing a uniform 5% tax rate on virtual asset transactions, arguing that such a measure could encourage compliance and potentially boost tax revenues by 40%. He cautioned against imposing new experimental tax structures that could disrupt financial stability.
Senator Anusha Rahman broadened the debate by criticizing customs authorities, pointing to alleged corruption along the Quetta-Taftan trade route, where traders face 23 checkpoints and report being forced to pay bribes. She questioned whether the Virtual Assets Bill would help curb or exacerbate such practices, particularly in terms of money laundering risks.
The committee ultimately concluded that while virtual assets could create new avenues for economic growth and financial inclusion, they also carry heightened risks of illegal transfers, criminal financing, and unregulated market exposure. Lawmakers called for comprehensive regulation that balances innovation with robust governance to safeguard both the financial system and the public interest.
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