Experts urge a phased approach to regulate crypto, balancing innovation with consumer protection and combating illicit activities.
Key Takeaways:
i) Pakistan has emerged as a leading country in cryptocurrency adoption, but its market remains largely unregulated, posing risks of misuse.
ii) A comprehensive regulatory framework is urgently needed to foster responsible innovation, protect consumers, and combat illicit activities within the crypto market.
iii) The article proposes a phased approach to regulation, including establishing an oversight authority, aligning with international standards, and promoting strategic integration.
Islamabad, Pakistan – April 19, 2025 – In a recent analysis published by Geo.tv, titled “Regulating crypto” and authored by Mariam Saleem, concerns were raised regarding the regulation of the rapidly evolving cryptocurrency market in Pakistan. The article highlights Pakistan’s prominent position in cryptocurrency adoption despite the absence of a comprehensive regulatory framework. Saleem states, “Pakistan, despite initial skepticism, became a leading country in crypto adoption, but its market remains largely unregulated, leading to potential misuse.”
The report emphasizes the urgent need for a structured approach to cryptocurrency regulation in Pakistan. The current lack of regulation leaves the market vulnerable to illicit activities and poses risks to consumers. “[A] comprehensive regulatory framework” is necessary “to foster responsible innovation, protect consumers, and combat illicit activities,” according to Saleem.
Aligning with international Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) standards is also crucial. Clarifying the legal definitions of cryptocurrencies and related terms is essential for creating a clear regulatory landscape.
The proposed phased approach includes several key steps. Initially, the focus should be on establishing a central oversight authority to govern the cryptocurrency market. Aligning with international Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) standards is also crucial. Clarifying the legal definitions of cryptocurrencies and related terms is essential for creating a clear regulatory landscape. Furthermore, the licensing of Virtual Asset Service Providers (VASPs) would bring a level of accountability and transparency to the market.
Subsequent phases should focus on controlled innovation through regulatory sandboxes, allowing for experimentation with new technologies under supervision. Creating a legal framework for the use of blockchain technology, the underlying technology behind cryptocurrencies, is also vital for its broader adoption. Finally, implementing consumer protection standards is paramount to safeguard investors from potential risks associated with cryptocurrency investments.
Strategic integration of cryptocurrencies into the Pakistani economy is also recommended, including regulating Bitcoin mining, developing a cryptocurrency taxation policy, and promoting international cooperation to address cross-border issues.
While the State Bank of Pakistan and the government have been deliberating on cryptocurrency regulation for some time, a concrete framework is still under development. Recent reports suggest a cautious approach, with the central bank exploring pilot projects to assess the feasibility of cryptocurrency transactions. Pakistan’s Crypto Future Uncertain Amid Regulatory Delays.
A well-defined regulatory framework is crucial for Pakistan to harness the economic potential of cryptocurrencies while mitigating associated risks. This will not only attract investment but also foster innovation and create new opportunities for economic growth.
