The State Bank of Pakistan (SBP) has announced its decision to legalize virtual assets and introduce a central bank-backed digital currency.
In a briefing to the Senate Finance Committee, chaired by Senator Saleem Mandviwalla, Deputy Governor Dr. Inayat Hussain revealed that the advisory declaring cryptocurrency illegal will be withdrawn, paving the way for a regulated framework for digital assets.
Dr. Inayat Hussain stated that work is underway to develop a digital currency, which will be issued solely by the State Bank of Pakistan. The digital rupee will enable the purchase of virtual assets, providing a legal and regulated avenue for such transactions.
Senator Afnanullah Khan revealed that Pakistanis have already invested around $21 billion in cryptocurrencies, underscoring the need for regulation.
The proposed Virtual Asset Bill 2025 will apply nationwide, according to the Ministry of Law and Justice consultant. The bill includes provisions for establishing a Virtual Asset Regulatory Authority, which will oversee licensing, regulations, and monitoring of virtual assets. Barrister Syed Shehroze explained that virtual assets will be transferable and usable across the country, but cannot be used for purchasing goods, services, or investments outside the ecosystem.
The bill introduces safeguards to protect customers and ensure secure investments. The central bank is collaborating with vendors to develop the digital currency, which will be issued to offices established in Pakistan for virtual asset transactions. A legal framework for cryptocurrency will also be developed, with regulatory advisories issued once finalized.
Dr. Inayat Hussain further stated that a framework will be created for the sale of virtual assets abroad, ensuring compliance with international standards. The Virtual Asset Regulatory Authority will be established under Section 6 of the proposed ordinance, with its board comprising key officials, including the Governor of the State Bank, Secretaries of Finance, Law, and IT, as well as the Chairpersons of the FBR, SECP, and Digital Pakistan. The DG FIA will also be part of the board.
The Senate Finance Committee proposed including a Member of the National Assembly and a Senator on the authority’s board. It also recommended that the Chairman of the authority should have at least five years of experience, with a maximum age limit of 55 years. The bill incorporates measures aligned with FATF, anti-money laundering (AML), and counter-terror financing (CTF) standards.
The committee proposed an exemption from the age limit for the Chairman of the Crypto Authority if they are serving a second term. Senator Afnan Ullah suggested imposing a percentage-based fee on service providers and exchanges, while questioning the rationale behind limiting transactions to $10,000. “There should be no threshold limit,” said Senator Mohsin Aziz.
Senator Afnan Ullah raised concerns about data privacy, emphasizing that service providers should be held accountable for protecting user data. He also called for measures to prevent the misuse and leakage of sensitive information, stating, “Those with access to trends and data could make significant profits.”
To ensure transparency, board members will be prohibited from sharing policy-level information or engaging in trading based on insider knowledge. They will also be restricted from benefiting through family members.
According to Barrister Syed Shahroze, virtual assets will be transferable and usable nationwide, but cannot be used for direct payments, services, or goods outside the regulated ecosystem. They will also not be valid for general investment or payment settlements. Safeguards for investor protection and anti-money laundering compliance, aligned with FATF standards, have been built into the draft law.
The authority will initially be funded by the Government of Pakistan, with future revenue generated through licensing fees, penalties, and other charges. The Ministry of Law and Justice consultant emphasized that the authority will operate independently, ensuring a secure and regulated environment for virtual assets.
The Senate Finance Committee welcomed the initiative but deferred further discussions until the next meeting to finalize the details of the Virtual Asset Bill 2025.