Pakistan Senate Approves Crypto Regulation Bill
Pakistan's Senate has approved a new bill aimed at regulating cryptocurrencies. The legislation is designed to provide legal clarity and investor protection in one of the world's largest emerging crypto markets.
The newly established Pakistan Virtual Assets Regulatory Authority (PVARA) is central to this legislation, creating a formal framework for an industry that has operated in a grey area. The authority is empowered to license and supervise virtual asset service providers, including exchanges and digital wallet services, to enhance investor protection and market integrity. Unlicensed operations could face severe penalties, including up to five years in prison and fines of up to Rs50 million. This regulatory clarity is a significant shift from the State Bank of Pakistan's 2018 advice for financial institutions to avoid crypto transactions. The move aims to bring Pakistan's burgeoning crypto market, which has seen transaction volumes exceeding $100 billion in fiscal year 2025, into the formal economy. The government is also considering a "time-bound amnesty" for current crypto traders to encourage compliance. A key feature of the new framework is a "regulatory sandbox" launched by PVARA to test real-world applications for tokenization, stablecoins, and remittances under regulatory supervision. This controlled environment is designed to foster innovation among startups by allowing them to test products with limited users and transaction caps for up to 18 months before a full-scale launch. To align with local financial principles, the ordinance mandates the creation of a Sharia Advisory Committee. This body will review and certify crypto products for compliance with Islamic finance, a move intended to boost financial inclusion and cater to cultural and religious frameworks within the country. The bill's passage through the Senate is a critical step, and it will now move to the National Assembly for approval before being signed into law by the President. Lawmakers anticipate this process could be completed within weeks, officially legalizing the trading of major cryptocurrencies like Bitcoin and Ethereum through regulated exchanges. This legislative push is part of a broader strategy to position Pakistan as a leader in the digital economy of the global south. Officials have announced plans to utilize surplus electricity for Bitcoin mining and are exploring the tokenization of up to $2 billion in state-owned assets, including sovereign bonds and treasury bills, in partnership with major exchanges like Binance.
