ISLAMABAD: Pakistan announced plans on Tuesday to explore the establishment of a National Crypto Council, tasked with developing regulations and frameworks for digital currencies while ensuring the stability and security of the country’s financial system.
According to an announcement of the Ministry of Finance, Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb chaired a high-level meeting on digital assets.
The meeting was attended by foreign delegates, including US President Donald Trump’s Advisers for Digital Assets. Minister of State for IT & Telecom Ms Shaza Fatima Khawaja, governor of State Bank, secretary of finance and secretary of IT & Telecom were also present. They discussed the global evolution of cryptocurrency, its increasing adoption, and the regulatory frameworks being implemented internationally in line with the US government policies. The deliberations focused on financial security, risk mitigation and the potential impact of digital assets on Pakistan’s economy. Senator Aurangzeb emphasized the importance of a well-regulated digital asset framework, aligning Pakistan with international best practices and complying with Financial Action Task Force (FATF) guidelines. He highlighted the government’s commitment to exploring digital assets and integrating blockchain technology as part of its broader strategy to modernize the financial sector.
The discussions also included the tokenization of key infrastructure and state-owned enterprises (SOEs) assets, allowing for increased liquidity, broader investor participation and greater efficiency in capital markets. It was noted that various stakeholders, including foreign and domestic investors, had already developed product-ready digital asset solutions that could be explored within a regulatory sandbox.
Pakistan currently has over 20 million active users in the digital asset market who face significant challenges, including high transaction fees. The finance minister reaffirmed his commitment to regulating and encouraging this industry by adopting appropriate frameworks, laws and incentives to ensure transparency and facilitate digital business growth. He directed the relevant stakeholders to formulate a comprehensive framework that ensures security, transparency, regulatory compliance and economic viability while safeguarding against financial crimes and illicit activities.
He also stressed the need for a balanced approach — one that encourages innovation and investment in digital assets while maintaining strict regulatory oversight in line with international standards. To enhance this initiative, the government will consider establishing a National Crypto Council, which will serve as a dedicated advisory body comprising key government representatives, regulatory authorities and industry experts.
This Crypto Council will oversee policy development, address regulatory challenges and ensure that Pakistan’s digital asset ecosystem evolves in a secure, compliant, and sustainable manner. It will also collaborate with friendly countries to develop standardized frameworks for international digital economic engagement.
The meeting concluded with a consensus on adopting a cautious yet forward-looking approach, ensuring that future developments in the digital asset space align with national interests, FATF guidelines and global financial standards.
Meanwhile, Pakistan has informed the IMF that the Panda Bond would be launched during the Fiscal Year 2025-26, as the prerequisite conditions of fulfilling guarantees from two international financial institutions had not yet been accomplished.
Earlier, the Ministry of Finance planned to launch the Panda bonds in the Chinese market in the current fiscal year but now it does not seem feasible.
However, efforts to secure guarantees from two international financial institutions like the Asian Development Bank (ADB) and Asian Infrastructure Investment Bank (AIIB) have been underway and will take some more time.
Top officials of the government confirmed to The News that now the IMF had been informed that the Panda bond would be launched in the first half (July-Dec) of the next fiscal year. For Panda bond, Pakistan wishes to secure $1 billion but in the first prescription, it will secure $200 to $250 million. Secondly, the IMF review mission will arrive in Islamabad on the coming weekend and both sides will kick-start talks from Monday (March 3, 2025) for the completion of the first review under the $7 billion Extended Fund Facility (EFF).
The FBR has been facing a shortfall of Rs468 billion in the first seven months and now the tax machinery is heading towards another expected shortfall of over Rs100 billion for February 2025. So, the overall shortfall may touch Rs568 or Rs578 billion in eight months (July-Feb) of the current fiscal year.
The FBR has envisaged a tax collection target of Rs980 billion for the current month (Feb 2025) and there is a quite big target envisaged for March 2025 to the tune of Rs1,280 billion for meeting the end quarter target agreed with the IMF.
For the end of the March quarter, the FBR will have to fetch Rs9,168 billion by March 31, 2025, as agreed with the IMF.
It is yet to be seen how the IMF responds to such a tax shortfall. The Fund staff had incorporated in its staff report that in case of shortfall, the FBR may have to implement the contingency taxation measures by raising tax rates on different products during the ongoing financial year.
On the other hand, the Ministry of Finance seems ready to request the upcoming IMF review mission for making adjustments to the macroeconomic and fiscal framework so that the FBR target might be revised downward keeping in view the performance of growth in different sectors, especially large-scale manufacturing and receding inflationary pressures.
The policy rate also witnessed a massive decline and came down from 22 percent to 12 percent which also negatively affected the FBR’s tax collection.
Meanwhile, the visiting technical mission of the IMF on climate finance under RSF has asked the government to strengthen the Monitoring and Evaluation of the Public Sector Development Program (PSDP) in a bid to stop leakages in the development schemes.
The IMF team also inquired whether the feasibility studies of all PSDP projects were approved before the insertion of projects into the PSDP list. There are over 1,200 development schemes in the PSDP with a whopping requirement of over Rs12 trillion to meet the full cost of the completion of projects. The rampant increase in throw-forward has resulted in cost and time overrun in the PSDP projects.
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