The State Bank of Pakistan (SBP) has issued a formal clarification that it has never declared virtual assets (VAs), including cryptocurrencies, as illegal. In a press release, the SBP emphasized that its earlier advisory to banks and other financial institutions to avoid dealings in virtual assets was a precautionary move aimed at safeguarding regulated entities and their customers, rather than a declaration of illegality.
This clarification follows recent remarks made during a briefing to the National Assembly’s Standing Committee on Finance, where it was suggested that the trading and holding of cryptocurrencies remain illegal in Pakistan. The committee was informed that crypto-related transactions must be reported to the Financial Monitoring Unit (FMU), which may refer such cases to the Federal Investigation Agency (FIA) for further investigation.
SBP Executive Director Sohail Jawad confirmed that the 2018 directive advising financial institutions against engaging with virtual assets remains in place. However, the central bank also noted that it is actively working with the Finance Division and the Pakistan Crypto Council (PCC) to develop a comprehensive legal and regulatory framework for digital assets in the country.
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The SBP stated that a structured framework will help clarify the legal status of cryptocurrencies and ensure appropriate consumer protection and investor safety. Despite this, Finance Secretary Imdad Ullah Bosal maintained that cryptocurrencies are currently banned in Pakistan, and individuals involved in such activities may be subject to investigation by relevant enforcement agencies.
During the finance committee session, questions were raised about the creation of the Pakistan Crypto Council without prior consultation with the parliament or the SBP. In response, the Secretary of Finance clarified that the PCC was established on the directive of Prime Minister Shehbaz Sharif through an executive order and functions in an advisory capacity.
Concerns were also raised about the federal government’s recent announcement to allocate 2,000 megawatts of electricity for crypto mining and artificial intelligence (AI) data centers. Committee member Mirza Ikhtiyar Baig questioned why the government was prioritizing crypto-related initiatives over local industry support.
Pakistan remains one of the top ten countries globally in terms of cryptocurrency adoption, with over 20 million active users and digital asset transactions surpassing $20 billion. The country also receives approximately $35 billion annually in remittances, a sector where blockchain-based solutions could offer significant benefits.
The Standing Committee on Finance plans to summon the SBP, the Securities and Exchange Commission of Pakistan (SECP), and representatives of the Pakistan Crypto Council in its next session to gain further insights into the legal and economic implications of cryptocurrency regulation in Pakistan.
