Islamabad: In a landmark move, the State Bank of Pakistan (SBP) has announced its decision to legalize virtual assets and introduce a central bank-backed digital currency, paving the way for a regulated crypto ecosystem in the country.
During a briefing to the Senate Finance Committee, chaired by Senator Saleem Mandviwalla, SBP Deputy Governor Dr. Inayat Hussain confirmed that the earlier advisory declaring cryptocurrency illegal will be withdrawn. This decision will enable the establishment of a regulated framework for digital assets in Pakistan.
State-Backed Digital Rupee
Dr. Inayat Hussain revealed that the SBP is actively working on launching a digital rupee, which will be exclusively issued by the central bank. The digital currency will allow the purchase of virtual assets, ensuring all transactions are conducted through a legal and regulated channel.
Senator Afnanullah Khan highlighted that Pakistanis have already invested nearly $21 billion in cryptocurrencies, stressing the urgency of a comprehensive regulatory framework.
Virtual Asset Bill 2025
According to the Ministry of Law and Justice, the Virtual Asset Bill 2025 will be implemented nationwide. Key provisions include:
Establishment of the Virtual Asset Regulatory Authority (VARA) to oversee licensing, regulations, and monitoring.
Secure frameworks ensuring compliance with FATF, AML (Anti-Money Laundering), and CTF (Counter-Terror Financing) standards.
Transferable virtual assets usable within Pakistan’s ecosystem, but restricted from being used for direct goods, services, or foreign investments.
Barrister Syed Shehroze confirmed that strong investor safeguards and data protection measures will be included to prevent misuse and protect user privacy.
Governance & Oversight
The proposed VARA board will include:
SBP Governor
Secretaries of Finance, Law, and IT
Chairpersons of FBR, SECP, and Digital Pakistan
DG FIA
The Senate Committee further recommended including an MNA and a Senator on the board. The Chairman of the authority must have at least five years’ experience, with an age cap of 55 years, though exemptions may be allowed for a second term.
Revenue Model & Compliance
Initially funded by the Government of Pakistan, the authority will later generate revenue through licensing fees, penalties, and service charges. The framework will also regulate service providers, requiring strict data privacy measures and accountability.
To ensure transparency, board members will be barred from insider trading or sharing policy-level information for personal or family gain.
Future Roadmap
Dr. Inayat Hussain confirmed that SBP is also working on a framework for cross-border virtual asset sales, ensuring compliance with international financial standards.
The Senate Finance Committee welcomed the initiative but deferred final approval of the Virtual Asset Bill 2025 until the next meeting for further deliberations.