SBP, Finance ministry inform NA body: ‘Cryptocurrency is not legal in Pakistan’

ISLAMABAD: The State Bank of Pakistan (SBP) and the Ministry of Finance on Thursday disclosed that the cryptocurrency is not legal in Pakistan and trading of cryptocurrencies is not permitted in the country.

Both the SBP and the Finance Ministry stressed the need for a robust legal framework for trading of cryptocurrency in the country. “Presently, cryptocurrency is banned in Pakistan,” they added.

This was disclosed by officials of SBP and Finance Ministry during the meeting of National Assembly Standing Committee on Finance on Thursday.

Pakistan establishes Digital Assets Authority to regulate crypto, blockchain

According to the SBP officials, “the SBP in 2018 issued instructions to the banks to prohibit trading of cryptocurrency in the country. Till now, it is not a legal tender. The SBP has given its recommendations to the Crypto Council.”

The secretary Ministry of Finance informed the committee that “very preliminary work has been done regarding cryptocurrency, but we need a proper legal framework in this regard.”

MNA Mirza Ikhtiar Baig said there is a perception among the people that Pakistan has adopted the cryptocurrency and people have started making investment in the cryptocurrency.

MNA Sharmila Faruqui questioned the recent policy shift prioritising digital currencies without addressing the associated regulatory deficiencies.

The secretary Ministry of Finance informed the committee that Pakistan has not shifted its policy stance towards virtual assets. Rather, it is considering virtual assets with cautious and forward-looking approach for an informed decision on prospects of regulatory enablement.

Towards this end, Pakistan Crypto Council (PCC) has been constituted with representation from the SBP, the Securities and Exchange Commission of Pakistan (SECP), and the Ministry of Finance (MoF). Under the umbrella of PCC, stakeholders’ discussions on the feasibility of regulatory framework for crypto currencies and virtual assets are under way.

The PCC is also exploring the beneficial use-cases to support responsible innovation in this area. This initiative aligns with FATF Recommendation 15, which mandates regulation and supervision of Virtual Asset Service Providers (VASPs). Given the growing interest in crypto-related activities, it is critical for Pakistan to build necessary legal and regulatory capacity to remain FATF-compliant before embarking on this journey.

The SBP and SECP have advised their regulated entities to refrain from processing, using, trading, holding, transferring value, promoting and investing in virtual currencies/tokens. Further, the regulated entities were advised not to facilitate their customers/account holders to transact in virtual currencies/ICO tokens. Any transaction in this regard shall immediately be reported to Financial Monitoring Unit (FMU) as a suspicious transaction.

These directives were issued due to the risks including high price volatility, closure of virtual currency exchanges and possibility of wallets hacking as well as risk of capital flight and financial instability.

Under the direction of the General Committee, a National Working Group, led by the FIA was constituted and they are currently working in this regard.

Both the Crypto Council and the Working Group are actively engaged in developing policy recommendations for legal and regulatory framework for Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs). This process includes a thorough evaluation of the associated money laundering, terrorist financing (MUTE), and broader systemic risks.

Given that virtual assets remain a rapidly evolving and inherently volatile domain, any potential future policy shift will be approached with the utmost caution. A structured and risk-based approach aligned with the “Pakistan First” principle will guide any decision-making, ensuring that national financial security and regulatory readiness remain a priority.

A multi-stakeholder consultative approach is being employed to ensure comprehensive risk management and policy cohesion.

Recently, the government has formed PCC with the objective to have stakeholders’ consultation on the feasibility of promoting responsible Innovation In digital assets under an appropriate regulatory framework.

GoP has also hired technical experts for the PCC. The objective is to initiate a stakeholders’ dialogue with crypto industry leaders to enhance the mutual understanding about the nature of the crypto/virtual assets, their business models, underlying technologies, and associated risks.

Presently, Pakistan’s legal framework on Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) conforms to the international standards, particularly the Financial Action Task Force (FATF) Recommendations. Furthermore, Pakistan continues to engage with international partners i.e. FATF, APG and IMF to further strengthen its AML/CFT regime and ensure compliance and sustainability with global AMUCFT standards.

Copyright Business Recorder, 2025