Pakistan moves towards crypto regulation as SBP clarifies stance on virtual assets

KARACHI: Top financial authorities are set to hold a meeting on June 2 to discuss a regulatory roadmap for digital assets, as the State Bank of Pakistan clarified on Friday that cryptocurrencies are not banned outright but remain outside the current legal framework.

The upcoming meeting of the Pakistan Crypto Council (PCC), to be chaired by Finance Minister Senator Muhammad Aurangzeb, will bring together key stakeholders including the governor of the State Bank of Pakistan (SBP), the chairperson of the Securities and Exchange Commission of Pakistan (SECP), and senior officials from the law and IT ministries. The session aims to formalise plans for the Pakistan Virtual Assets Regulatory Authority (PVARA), a proposed body to oversee the digital finance and crypto ecosystem.

The move comes as the SBP issued a rare public clarification, where it said that it had advised its regulated entities, including banks, development finance institutions, microfinance banks, electronic money institutions, payment system operators, payment service providers and exchange companies, to refrain from engaging in virtual assets (VAs) owing to the lack of a legal and regulatory framework for such assets, not because they were illegal.

“This was done to protect regulated entities and their customers from the risks emanating from the lack of such a framework,” the SBP said, in response to recent comments made during a parliamentary finance committee session.

The government on Thursday had reiterated to the National Assembly’s Standing Committee on Finance that cryptocurrency remains prohibited in Pakistan, with individuals engaged in crypto-related transactions liable to investigation by the Financial Monitoring Unit (FMU) and the Federal Investigation Agency (FIA).

Finance Secretary Imdad Ullah Bosal acknowledged that digital assets currently lack formal legislative backing. He clarified that the Pakistan Crypto Council, chaired by Finance Minister Muhammad Aurangzeb, functions as a task force with an advisory mandate -- to propose legal and procedural frameworks for the regulation of virtual assets.

The central bank confirmed it is now working with the Finance Division and the Pakistan Crypto Council to develop a structured legal regime for virtual assets, aimed at enhancing investor protection and reducing regulatory uncertainty.

“We understand that the legal and regulatory framework would provide the requisite clarity and legal coverage about VAs, ensuring consumer and investor protection,” it added.

The Pakistan Crypto Council, established in March, is spearheaded by Special Assistant to the Prime Minister on Blockchain and Crypto Bilal Bin Saqib. Saqib, who also serves as CEO of the council, is expected to present a proposal for the creation of PVARA at the upcoming meeting.

The council’s broader agenda includes fostering innovation in blockchain, attracting investment to the crypto sector, and laying the groundwork for a future-ready financial infrastructure.

Earlier this month, Pakistan allocated 2,000 megawatts of electricity to power a planned national network of Bitcoin mining and AI data centres. At the Bitcoin 2025 conference in Las Vegas, Saqib also introduced Pakistan’s first government-backed strategic bitcoin reserve, while simultaneously highlighting a shift in the government’s approach to digital assets.