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Crypto regulation
April 19, 2025
This image depicts virtual currencies represented on a PC motherboard: Ripple, Bitcoin, Ethereum, and Litecoin. — Reuters/File
Borderless, open-sourced, volatile, and decentralized – crypto is rapidly evolving and constantly developing. These are not just buzzwords; they define a technology that challenges the foundation of traditional financial systems.
The big question looming is: how do you regulate something designed to circumvent and defy regulation, when it is growing faster than the legislative power surrounding it?
Year after year, Pakistan has watched the progress of the global crypto revolution with caution – skeptical and silent. In 2018, the State Bank of Pakistan (SBP) issued a circular prohibiting banks from facilitating crypto transactions. But prohibition is not regulation, and silence is not strategy. And Pakistanis quickly realized the ripples of something larger. What is this astonishing asset class - a commodity, security, currency - or something entirely different?
Without any legal clarity or roadmap, Pakistan's cryptocurrency market has quietly grown under the shadows – unregulated, fraught with misunderstandings and risks of abuse. Yet, despite the legal void and risks, by 2021, the country had risen to third place globally in terms of cryptocurrency adoption, with an estimated 15 to 20 million active users.
The government has recently taken significant steps to formalize the crypto sector through the establishment of the Pakistan Crypto Council (PCC). Led by Bilal Bin Saqib and supported by key figures like the Finance Minister and the SBP Governor, the PCC aims to responsibly integrate digital assets into the national financial system. The appointment of Binance founder Changpeng Zhao as a strategic advisor further indicates the desire to align with global crypto standards. Still, challenges remain. Financial literacy is uneven, and institutional capacity is limited. Regulators now face the dual task of creating a global-standards framework in line with a rapidly evolving industry.
The regulation of cryptocurrency occupies a uniquely complex space, located at the intersection of multiple, often overlapping, regulatory frameworks. As blockchain-based applications continue to evolve rapidly and new cryptocurrency use cases emerge almost daily, each innovation introduces new legal uncertainties and risks.
