State Bank of Pakistan Clarifies No Ban on Cryptocurrencies Amid Conflicting Statements
The State Bank of Pakistan (SBP) has officially clarified that it has never declared virtual assets (VAs), including cryptocurrencies, as illegal in the country. This statement was issued in response to recent reports suggesting that cryptocurrency trading and holding remain banned.
SBP Issues Precautionary Advisory, Not a Ban
In a press release, the SBP explained that its advisory instructing banks, microfinance institutions, development finance institutions (DFIs), electronic money institutions (EMIs), and other financial service providers to avoid dealing in virtual assets was issued purely as a precautionary measure. “The advisory was issued solely to protect our regulated entities and their customers, not because VAs were declared illegal,” the central bank stressed.
This clarification follows a briefing to the National Assembly’s Standing Committee on Finance, where officials stated that entities involved in crypto activities must report transactions to the Financial Monitoring Unit (FMU), which then forwards them to the Federal Investigation Agency (FIA) for investigation.
Ongoing Regulatory Efforts and Government Position
SBP Executive Director Sohail Jawad confirmed to the committee that the 2018 directive regarding virtual assets remains effective. However, he noted that the SBP is collaborating with the Finance Division and the Pakistan Crypto Council (PCC) to develop a comprehensive legal and regulatory framework for cryptocurrencies. The aim is to clarify the legal status of digital assets and ensure investor protection and consumer safeguards.
Despite this, Secretary Finance Imdad Ullah Bosal reiterated during the same session that cryptocurrencies are currently banned in Pakistan. He warned that individuals dealing in such assets could face investigations by enforcement agencies including the FMU and FIA.
When asked by Committee Chairperson Nafisa Shah about the formation of the PCC without parliamentary or SBP consultation, the finance secretary explained that the council was established through executive orders from Prime Minister Shehbaz Sharif. He described the PCC’s role as advisory, focused on proposing legal and procedural recommendations.
National Debate on Crypto Policy Continues
Committee member Mirza Ikhtiyar Baig raised concerns about government priorities, questioning the decision to allocate 2,000 megawatts (MW) of electricity to Bitcoin mining and AI data centers instead of supporting local industries. This allocation was announced earlier in May as part of a national initiative, sparking further discussion on Pakistan’s evolving approach to cryptocurrencies.
Pakistan is currently among the top ten countries globally for cryptocurrency adoption and previously ranked third on the Global Crypto Adoption Index. With over 20 million active crypto users and digital asset transactions exceeding \$20 billion, the country shows significant potential for blockchain-based innovation. Additionally, Pakistan receives approximately \$35 billion in remittances annually, a sector that could benefit from blockchain solutions.
The Standing Committee on Finance plans to summon representatives from the SBP, Securities and Exchange Commission of Pakistan (SECP), and Pakistan Crypto Council in its upcoming session to further examine the legal and economic implications of digital asset adoption.
