The State Bank of Pakistan (SBP) has announced a landmark decision to legalize virtual assets and introduce a central bank-backed digital currency. This move marks a major step toward modernizing Pakistan’s financial system and aligning it with global digital trends.
Advisory Against Cryptocurrency to Be Withdrawn
In a briefing to the Senate Finance Committee, chaired by Senator Saleem Mandviwalla, Deputy Governor Dr. Inayat Hussain confirmed that the advisory declaring cryptocurrency illegal will soon be withdrawn. This will pave the way for a regulated framework for digital assets in Pakistan.
Dr. Hussain explained that the central bank is developing a digital rupee, which will be issued only by the SBP. This currency will allow Pakistanis to purchase and hold virtual assets in a safe and regulated manner.
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Need for Regulation
Senator Afnanullah Khan highlighted the urgency of regulation by revealing that Pakistanis have already invested around $21 billion in cryptocurrencies. Without a legal framework, these investments face significant risks.
Virtual Asset Bill 2025
According to the Ministry of Law and Justice, the Virtual Asset Bill 2025 will apply across the country. The bill introduces a Virtual Asset Regulatory Authority (VARA), which will manage licensing, oversight, and monitoring of virtual assets.
Barrister Syed Shehroze explained that virtual assets will be transferable and usable nationwide, but they cannot be used for buying goods, services, or making external investments.
Safeguards and Regulation
The bill aims to protect customers through strict regulations and safeguards. The SBP is working with technology vendors to develop the digital currency, which will be issued to authorized offices in Pakistan.
A legal framework for cryptocurrencies will also be introduced, with regulatory advisories issued once finalized. Additionally, a framework will be designed to allow foreign transactions of virtual assets, ensuring compliance with international standards.
Virtual Asset Regulatory Authority (VARA)
The VARA will be established under Section 6 of the proposed ordinance. Its board will include:
- Governor of SBP
- Secretaries of Finance, Law, and IT
- Chairpersons of FBR, SECP, and Digital Pakistan
- DG FIA
This ensures coordination among key financial and legal institutions.
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 introduce a regulated framework for virtual assets.
2. What is the digital rupee?
It is a central bank-backed digital currency, issued only by the SBP, to enable secure transactions in virtual assets.
3. What is the purpose of the Virtual Asset Bill 2025?
The bill provides a legal framework for digital assets and establishes the Virtual Asset Regulatory Authority for regulation and monitoring.
4. Can Pakistanis use cryptocurrencies to buy goods and services?
No, virtual assets cannot be used to purchase goods or services outside the regulated ecosystem.
5. Why is this regulation important?
Pakistanis have already invested around $21 billion in cryptocurrencies. Regulation will protect investors, ensure transparency, and align with international standards.
