cryptopakistanmove

Islamabad, August 30, 2025 – In a landmark move signaling a shift from prohibition to structured oversight, Pakistan has formalized its approach to cryptocurrency and digital assets through the Virtual Assets Ordinance, 2025. Approved by President Asif Ali Zardari on July 8, 2025, the ordinance establishes a dedicated regulatory framework, marking the end of a long-standing ban and paving the way for innovation in blockchain technology.
From Ban to Regulation: The Evolving Landscape
Cryptocurrency was previously deemed illegal in Pakistan, with the State Bank of Pakistan (SBP) and the Ministry of Finance enforcing a blanket ban on related transactions since 2018. Financial institutions were barred from facilitating crypto activities, and the public was warned against potential financial and legal risks.
However, with over 40 million crypto wallets in the country and a young population driving adoption, the government has pivoted toward regulation to harness economic potential while mitigating risks.
The journey began earlier in the year when Senator Dr. Afnan Ullah Khan of the Pakistan Muslim League-Nawaz (PML-N) introduced the private member's "Virtual Assets Bill 2025" in January. The bill aimed to create a comprehensive regulatory structure for digital assets, including cryptocurrencies, and proposed the establishment of specialized zones for virtual assets, exchanges, and service providers. It also outlined incentives like tax exemptions for foreign investors in local blockchain projects and the allocation of revenues toward infrastructure and education.
Although the bill faced initial hurdles in the Senate, including claims that the government had adopted its ideas without credit, it influenced the subsequent ordinance.
Key Provisions and the New Regulatory Authority
The Virtual Assets Ordinance, 2025, creates an independent federal authority to license and oversee crypto exchanges, service providers, and related businesses. This body will ensure compliance with anti-money laundering (AML) standards and protect against financial crimes, aligning with international norms.
Additionally, the SBP is preparing to launch a pilot for a central bank digital currency (CBDC), further integrating digital finance into the economy.
Complementing this is the Pakistan Crypto Council (PCC), a government-backed entity established in February 2025 under the leadership of Finance Minister Muhammad Aurangzeb. The PCC focuses on promoting blockchain adoption, policy development, and positioning Pakistan as a leader in digital assets among emerging markets. It has already formed technical committees to draft detailed frameworks and engaged in high-level discussions on Bitcoin's potential role in national reserves.
The council has highlighted Pakistan's advantages, including a median population age of 23 and surplus electricity allocation for crypto mining and AI data centers—though proposals for subsidies faced scrutiny from the International Monetary Fund (IMF).
Balancing Innovation and Caution
Finance Minister Aurangzeb has been vocal about the need for a "strategic transition" to blockchain and digital assets, emphasizing their role in the "new economy." However, he has cautioned against hasty moves, warning that inadequate regulations could invite international scrutiny or sanctions, especially following Pakistan's 2022 exit from the Financial Action Task Force (FATF) grey list.
"We must embrace this technology to avoid being left behind, but with safeguards to protect our financial stability," Aurangzeb stated in a recent address.
The SBP shares these concerns, noting that unregulated crypto could expose the nation to risks like money laundering and volatility. Yet, with global crypto market capitalization surpassing $4 trillion and increasing institutional interest, officials see opportunities for economic growth.
Implications for Investors and the Economy
The new regulations include taxation policies, with fines for non-compliance ranging from PKR 10,000 to 50,000 and up to 3% of trade value for major violations.
Proponents argue this will reduce fraud, which has risen amid regulatory ambiguity, and attract foreign investment.
International figures like MicroStrategy's Michael Saylor have even offered advisory support for Bitcoin integration.
As Pakistan joins nations like India in refining crypto policies, the focus remains on balancing innovation with security.
With the PCC and new authority in place, the country is poised to integrate digital assets into its financial landscape, potentially transforming its economy in the process.
This development has sparked optimism among local crypto enthusiasts, with recent cabinet approvals reinforcing the government's commitment.
As one X user noted, "This marks a significant step toward formalizing crypto regulations in the country."
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Pakistan is considering launching a rupee-backed stablecoin, as experts warn that delays in regulating digital assets could cost the country up to $25 billion in lost economic opportunities.

Speaking at the Sustainable Development Policy Institute (SDPI) Conference on Friday, Pakistan Banks Association (PBA) President Zafar Masud said the nation could unlock $20–$25 billion in crypto-related growth, according to a report by local news outlet Daily Times.

Masud pointed out the booming global stablecoin market, adding that Pakistan is “seriously considering a rupee-backed stablecoin” and that a Central Bank Digital Currency (CBDC) could improve financial access while reducing remittance costs.

Faisal Mazhar, Deputy Director of Payments at the State Bank of Pakistan, revealed that a CBDC prototype is already being developed with assistance from the World Bank and International Monetary Fund (IMF), with a pilot phase planned before full rollout.

Related: Demographics will 'leapfrog' Bitcoin adoption in Pakistan — Bilal Bin Saqib

ZAR aims to bring stablecoins to Pakistan’s unbanked
Pakistan’s plan to launch its own stablecoin comes shortly after ZAR, a fintech startup working to make dollar-backed stablecoins accessible to everyday users in Pakistan and other emerging markets, raised $12.9 million in a funding round led by Andreessen Horowitz (a16z).

Other investors included Dragonfly Capital, VanEck Ventures, Coinbase Ventures and Endeavor Catalyst. Targeting Pakistan’s 240 million population, where over 100 million adults remain unbanked, ZAR aims to bridge the financial inclusion gap through stablecoin access.

As Cointelegraph reported, Pakistan jumped six places to secure third position in Chainalysis’ 2025 Global Crypto Adoption Index, cementing its status as one of the fastest-growing cryptocurrency markets worldwide.
Pakistan invites global crypto firms to apply for licenses
In September, Pakistan opened its doors to international crypto exchanges and virtual asset service providers (VASPs), inviting them to apply for licenses under a new federal regulatory framework.
The Pakistan Virtual Asset Regulatory Authority (PVARA) urged leading firms to submit Expressions of Interest (EoIs) to help shape the country’s emerging digital asset industry. PVARA, set up under the Virtual Assets Ordinance 2025, is tasked with licensing, regulating and supervising VASPs.

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