Abdullah Kamran
Pakistan is gradually — and perhaps cautiously — moving toward formalising the presence of cryptocurrencies and digital assets within its economic framework. On paper, this transition signals a willingness to embrace the future of finance. The latest development is the federal cabinet’s approval of the Pakistan Virtual Assets Regulatory Authority (PVARA), a proposed institution tasked with licensing, regulating, and supervising virtual asset service providers (VASPs). According to the finance ministry, this move is meant to bring Pakistan in line with international regulatory standards, particularly those established by global bodies such as the Financial Action Task Force (FATF), the International Monetary Fund (IMF), and the World Bank.
At face value, this is a significant policy milestone. The Ministry of Finance even called it a “landmark step” toward creating a comprehensive legal and institutional framework for digital assets. But while the rhetoric sounds promising, the exact details of this “comprehensive framework” remain vague and undefined. Crypto investors, entrepreneurs, and market observers are rightly asking: what does this actually mean for them?
According to official statements, PVARA will be responsible for overseeing not just regulatory compliance, but also ensuring consumer protection, anti-money laundering (AML) enforcement, and cybersecurity protocols. These are essential components for any digital economy initiative, but they also raise questions about practical implementation. For instance, what will be the tax implications for crypto holders? Will mining and trading be legalised and licensed? How will the government treat international crypto exchanges operating in Pakistan? These crucial aspects are yet to be clarified.
The introduction of PVARA also raises questions about the state’s readiness to engage with a rapidly evolving, technically complex financial ecosystem. Without robust infrastructure, trained personnel, and transparent laws, regulatory bodies risk either being ineffective or overly punitive — both of which could discourage legitimate innovation and investment.
Beyond the technical and policy questions, there is also a growing concern about foreign influence in Pakistan’s sudden openness to crypto. Earlier this year, the government announced the formation of the Pakistan Crypto Council — an oversight body for digital assets — shortly after a visit by a delegation of American businesspersons closely tied to the Donald Trump political orbit. Reports suggest that cryptocurrencies featured prominently in a private meeting between Mr. Trump and Pakistan’s army chief in Washington.
International media outlets such as Bloomberg and The New York Times have been closely tracking the Trump family’s involvement in crypto. Their reporting raises ethical red flags, including potential conflicts of interest and political motives behind their crypto evangelism. In this context, Pakistan must proceed with extreme caution. The growing interest of high-profile foreign individuals in shaping Pakistan’s crypto narrative suggests that geopolitical and economic agendas may be at play — ones that do not necessarily align with Pakistan’s long-term interests.
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There is no denying that cryptocurrencies and digital assets hold significant promise. They offer financial inclusion, decentralised access to wealth, and innovative applications for commerce and governance. In a country like Pakistan, where access to banking is limited and trust in financial institutions remains fragile, blockchain-based technologies could revolutionise the financial landscape.
However, the risks are equally real. Cryptocurrencies are prone to speculative bubbles, fraudulent schemes, regulatory arbitrage, and massive volatility. Without a proper understanding of the technology and its implications, Pakistan risks importing more chaos than innovation. The lack of investor education, poor financial literacy, and weak cyber law enforcement could make Pakistan fertile ground for scams and financial disasters.
The government’s recent announcements, though ambitious, do little to address these very real dangers. It is not enough to create a regulatory body with impressive-sounding responsibilities; what is needed is a transparent, consultative, and inclusive policymaking process. Regulators must engage local industry players, legal experts, academics, and civil society to craft smart, effective, and enforceable rules.
Pakistan would do well to study international examples before finalising its crypto strategy. Countries like Japan and Switzerland have developed clear, investor-friendly frameworks that support innovation while minimising risk. Others, like China, have banned crypto altogether due to capital flight and fraud concerns. The UAE and Singapore offer middle-ground approaches that combine oversight with innovation zones.
Each of these models reflects a deep understanding of local conditions. Pakistan must adopt a model that suits its own economic structure, legal system, and social realities — rather than blindly following foreign advice or political pressures. Regulators should be particularly wary of “crypto lobbying” from external actors who may view Pakistan as a soft target or an untapped market.
If Pakistan’s crypto journey is to be successful, it must be rooted in transparency, public trust, and national interest. This means releasing the full policy framework for public review, conducting stakeholder consultations, and creating grievance redress mechanisms for investors and citizens. Vague policies and behind-the-scenes lobbying will only sow suspicion and resistance.
Moreover, the state must clarify how this new regulatory authority will coordinate with other financial and legal bodies — such as the State Bank of Pakistan (SBP), the Securities and Exchange Commission of Pakistan (SECP), the Federal Board of Revenue (FBR), and law enforcement agencies. Without inter-agency coordination, crypto regulations risk being fragmented and ineffective.
Pakistan stands at the threshold of a new financial era. The formal recognition of cryptocurrencies and digital assets could potentially unlock innovation, investment, and modernisation. However, the path forward must be deliberate, inclusive, and sovereign. There is no room for rushed decisions, political expediency, or external pressure.
The formation of PVARA should be the beginning of a larger, transparent conversation about the future of finance in Pakistan — not the end of it. The state must ensure that its crypto policy is crafted in the best interest of its citizens, not foreign powers. At the same time, it must ensure that innovation is encouraged, but not at the cost of financial stability and public trust.
As Pakistan navigates this uncharted territory, its regulators must walk carefully — with eyes wide open.
