Experts highlight the imperative for a robust legal framework as Pakistan eyes digital assets for economic growth despite existing bans.
Key Takeaways:
i) Pakistan, despite its economic challenges, is among the top ten crypto-friendly nations, with a projected 28.9 million users by 2026 and anticipated revenues of $2.4 billion in 2025.
ii) The current legal structure in Pakistan does not recognize cryptocurrencies as legitimate assets or legal tender, necessitating urgent legislative amendments to define digital assets and establish the State Bank of Pakistan’s (SBP) regulatory role.
iii) While the government is exploring initiatives like allocating surplus electricity for Bitcoin mining and establishing a Strategic Bitcoin Reserve, a significant disconnect exists between these ambitious plans and the country’s existing legal prohibitions on cryptocurrency.
Islamabad, Pakistan – In a recent analysis published by Business Recorder titled “Cryptocurrency’s future in Pakistan” and authored by Dr Ikramul Haq, Huzaima Bukhari, and Abdul Rauf Shakoori, concerns were raised regarding the complex trajectory of cryptocurrency adoption and regulation in Pakistan. In the article, available at Https://www.brecorder.com/news/40366520/cryptocurrencys-future-in-pakistan, the authors state, “Legalization of crypto in such a volatile economic environment poses existential risks to monetary sovereignty and financial sector stability.”
The authors emphasize that despite its economic fragility, Pakistan is recognized as one of the top ten crypto-friendly nations globally. Projections indicate a substantial increase in cryptocurrency users in Pakistan, reaching an estimated 28.9 million by 2026, with projected revenues of $2.4 billion in 2025. This burgeoning interest, however, clashes with the prevailing legal landscape. The State Bank of Pakistan (SBP) and the Ministry of Finance have consistently maintained that cryptocurrency remains banned in the country, and all related transactions are currently illegal. The SBP, in 2018, issued directives to banks prohibiting cryptocurrency trading, a stance that remains in effect.
According to Dr Ikramul Haq, Huzaima Bukhari, and Abdul Rauf Shakoori, the unregulated adoption of cryptocurrencies could “erode confidence in the rupee, weaken the ability of State Bank of Pakistan (SBP) to manage inflation, and incentivize capital flight.” They further highlight the growing risk of financial disintermediation as users increasingly shift to decentralized financial systems, bypassing traditional banking infrastructure. This scenario presents a dual risk of systemic instability and heightened scrutiny from global regulatory bodies such as the Financial Action Task Force (FATF) and the International Monetary Fund (IMF).
In response to this evolving landscape, the Pakistani government has recently taken steps towards formulating a comprehensive regulatory framework. The Pakistan Crypto Council (PCC) was established in March 2025 to guide national policy on blockchain, digital currencies, and crypto-related investments. More recently, Pakistan announced plans to establish a government-led Bitcoin Strategic Reserve, making it one of the first Asian countries to consider integrating Bitcoin into its sovereign asset strategy. Furthermore, the government intends to establish an autonomous regulatory body, the Pakistan Virtual Assets Regulatory Authority (PVARA), to oversee the digital finance and crypto ecosystem.
The Ministry of Law and Justice, in consultation with the PCC and other stakeholders, has presented a draft version of the anticipated legislation. This proposed law aims to establish a detailed regulatory structure for digital and virtual assets, including provisions for governance, licensing, and investor protection, aligning with global standards. Finance Minister Muhammad Aurangzeb has underscored the urgency of completing and implementing this framework to “provide legal clarity and unlock the economic opportunities associated with blockchain and crypto technologies.”
However, a critical challenge remains the disconnect between these ambitious governmental initiatives and the existing legal prohibitions. As noted by the authors, “The right legal architecture, international cooperation, and governance transparency can turn this potential into a powerful national asset.” Without a clear legal framework that defines cryptocurrencies as digital assets rather than legal tender, and robust regulatory oversight, the risk of financial irregularities and instability persists. The ongoing discussions within the Pakistan Crypto Council aim to address these disparities, with a focus on laying the groundwork for a secure, transparent, and innovation-friendly regulatory environment that promotes responsible adoption of blockchain technology, protects investors, and enhances financial inclusion.
