The State Bank of Pakistan (SBP) has announced a historic decision to legalize virtual assets and introduce a central bank-backed digital currency. This step is expected to modernize Pakistan’s financial sector and bring it closer to international digital practices.
During a briefing to the Senate Finance Committee, chaired by Senator Saleem Mandviwalla, SBP Deputy Governor Dr. Inayat Hussain revealed that the advisory which previously declared cryptocurrency illegal will now be withdrawn. He explained that work is underway to develop a Digital Currency, which will be issued exclusively by the State Bank. This digital currency will provide Pakistanis with a safe and regulated way to invest in and hold virtual assets.
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Senator Afnanullah Khan stressed the importance of regulation by highlighting that Pakistanis have already invested nearly $21 billion in cryptocurrencies. Without a proper legal structure, these investments remain vulnerable, making the introduction of the new framework crucial for investor protection.
The upcoming Virtual Asset Bill 2025 will apply nationwide, according to the Ministry of Law and Justice. The bill includes provisions for setting up a Virtual Asset Regulatory Authority (VARA), which will oversee licensing, monitoring, and the regulation of virtual assets. Barrister Syed Shehroze clarified that while virtual assets will be transferable across Pakistan, they will not be allowed for the purchase of goods, services, or for making investments abroad.
To ensure safety and transparency, the bill introduces strong customer protection measures. The SBP is already collaborating with technology vendors to develop the digital rupee, which will be issued through authorized offices for virtual asset transactions. Alongside this, a legal framework for cryptocurrencies will also be rolled out, and regulatory advisories will follow once finalized.
The proposed plan also includes a framework for selling virtual assets abroad, ensuring compliance with international laws and standards. Under Section 6 of the ordinance, the Virtual Asset Regulatory Authority will be established. Its board will include the Governor of the SBP, Secretaries of Finance, Law, and IT, the Chairpersons of FBR, SECP, and Digital Pakistan, as well as the DG FIA, ensuring full institutional coordination.
FAQs
1. What decision has the State Bank of Pakistan made about cryptocurrencies?
The SBP has decided to withdraw its advisory declaring cryptocurrency illegal and will now regulate virtual assets under a legal framework.
2. What is the digital rupee?
The digital rupee will be a central bank-backed digital currency issued by the SBP, designed for secure transactions in virtual assets.
3. What is the Virtual Asset Bill 2025?
It is a new law that establishes the Virtual Asset Regulatory Authority (VARA) and introduces a nationwide legal framework for managing digital assets.
4. Can cryptocurrencies be used for buying goods and services in Pakistan?
No, cryptocurrencies and digital assets cannot be used for goods, services, or external investments. They will only operate within the regulated ecosystem.
5. Why does Pakistan need this regulation?
Pakistanis have already invested around $21 billion in cryptocurrencies. This regulation will protect investors, ensure transparency, and align Pakistan with global standards.
