Cryptocurrencies
The State Bank of Pakistan (SBP) has clarified that it has never officially declared virtual assets (VAs), including cryptocurrencies, as illegal. The clarification was issued in response to recent confusion and conflicting statements made during a National Assembly committee briefing on the subject.
In an official press release, the SBP stated that previous advisories to financial institutions — including banks, microfinance institutions, development finance institutions (DFIs), and electronic money institutions (EMIs) — were precautionary in nature. These advisories were meant to protect the financial sector and its customers from potential risks associated with unregulated digital assets.
“The advisory was issued solely to protect our regulated entities and their customers, not because virtual assets were declared illegal,” the statement read.
This clarification follows a recent session of the National Assembly’s Standing Committee on Finance, where concerns were raised about the legal status of cryptocurrency trading in Pakistan.
Committee members were informed that entities involved in cryptocurrency transactions must report their activities to the Financial Monitoring Unit (FMU), which may then refer cases to the Federal Investigation Agency (FIA) for further investigation.
During the briefing, SBP Executive Director Sohail Jawad confirmed that a 2018 directive advising against virtual asset dealings remains in effect. However, he emphasized that the SBP is actively working with the Finance Division and the newly formed Pakistan Crypto Council (PCC) to formulate a clear regulatory and legal framework for cryptocurrencies.
The aim, the SBP said, is to create a comprehensive policy that balances innovation with investor protection and financial stability.
Despite this, Secretary Finance Imdad Ullah Bosal maintained that cryptocurrency use is currently banned in Pakistan. He said individuals and entities involved in such activities could face legal scrutiny by the FMU and FIA.
He also noted that the PCC, which was created via executive orders from Prime Minister Shehbaz Sharif, serves only an advisory role and was not formed in consultation with Parliament or the SBP.
The committee meeting also highlighted growing political and economic concerns over the government’s recent move to allocate 2,000 megawatts (MW) of electricity for crypto mining and artificial intelligence (AI) data centers. Committee member Mirza Ikhtiyar Baig criticized the move, questioning why such resources weren’t directed toward supporting local industries.
Pakistan currently ranks among the top ten countries in global cryptocurrency adoption and was previously placed third on the Global Crypto Adoption Index.
With over 20 million active crypto users and more than $20 billion in digital asset transactions, the sector holds significant promise. Furthermore, Pakistan’s $35 billion remittance inflows present a major opportunity for blockchain-based solutions to improve efficiency and reduce costs.
The Standing Committee on Finance is expected to summon representatives from the SBP, the Securities and Exchange Commission of Pakistan (SECP), and the Pakistan Crypto Council in its next session to gain deeper insights into the economic and legal implications of digital asset adoption in the country.
