Pakistan drafts crypto regulation framework in push to formalise digital finance

KARACHI: Pakistan has begun drafting a regulatory framework for digital and virtual assets, as the government signals its intent to bring the crypto ecosystem under formal oversight.

The initiative was taken during a high-level meeting of the Pakistan Crypto Council (PCC), chaired by Finance Minister Muhammad Aurangzeb in Islamabad on Monday.

The meeting , attended virtually by Minister of State and Special Assistant to the Prime Minister on Blockchain and Crypto Bilal Bin Saqib, who also serves as CEO of the PCC, is part of broader efforts to align Pakistan’s digital finance sector with international standards while fostering innovation in blockchain technologies.

Also attending virtually was the governor of the State Bank of Pakistan (SBP), while the chairperson of the Securities and Exchange Commission of Pakistan (SECP) and secretaries from the Law and IT ministries joined in person.

The meeting focused on a draft regulatory framework for digital and virtual assets. Participants discussed aligning domestic regulations with global practices and emerging technology trends, including the possibility of establishing an independent regulatory authority to oversee crypto-related activity and ensure financial integrity.

The council underscored the need for a balanced regulatory approach -- one that protects investors, promotes transparency and supports innovation without compromising financial stability. To this end, a technical committee comprising representatives from the SBP, SECP, Law Division, and IT & Telecom Division will review the draft legislation and propose a governance structure for discussion at the PCC’s next meeting.

Aurangzeb reaffirmed the government’s commitment to modernising the financial sector, saying any future-ready regulatory framework must promote inclusion, transparency, and economic resilience.

The meeting followed a major announcement last week, when Saqib unveiled Pakistan’s first-ever government-led strategic Bitcoin reserve during the Bitcoin Vegas 2025 conference in the United States.

On Friday, the SBP issued a clarification saying that cryptocurrencies were not banned outright, but remain outside the existing legal framework. The central bank noted that it had advised regulated entities -- including banks, DFIs, microfinance banks, electronic money institutions, and payment service providers -- to avoid engaging with virtual assets (VAs) due to the absence of legal and regulatory protections, not because such assets are illegal.

This clarification came after the government told the National Assembly’s Standing Committee on Finance that cryptocurrencies remain banned and illegal in Pakistan. The government also added that individuals involved in cryptocurrency transactions could be investigated by the Financial Monitoring Unit (FMU) and the Federal Investigation Agency (FIA).

The path to virtual asset regulation in Pakistan remains uncertain. In a meeting of the Senate Standing Committee on Information Technology and Telecommunication, members raised concerns about the legitimacy of the PCC and the lack of parliamentary consultation in its formation. Some questioned whether it could be established solely through an executive order.

The Ministry of IT also clarified during the meeting that its involvement had been limited to providing input on the council’s terms of reference. However, several committee members argued that the Crypto Council should fall under the Ministry of IT rather than the Finance Division.