The State Bank of Pakistan clarified its position on digital assets, stating that it has never declared the ownership and trading of assets illegal. In a press release issued by the central bank, it stated that its previous warnings about the assets were mainly a precautionary measure.
In recent years, the State Bank of Pakistan has issued a recommendation directing banks, microfinance institutions, development finance institutions (DFIs), electronic money institutions (EMIs), and other financial service providers to refrain from trading virtual assets. However, it has now clarified that this directive was never a direct ban on trading or using the assets, but a measure to slow down the negative impact on residents of the country.
The Central Bank of Pakistan clarified its position on digital assets.
According to the bank's statement, the recommendation was aimed at protecting financial institutions and their users.
"The recommendation was issued solely to protect our regulated organizations and their clients, and not because virtual assets were declared illegal," said the central bank.
However, the SBP stated that establishing an official framework will provide the much-needed clarity on the legal status of digital assets in the country, as well as ensure investor protection and consumer safeguards.
The update came after a recent briefing by the Standing Committee of the National Assembly on Finance, where it was suggested that trading and storing digital assets in Pakistan remain illegal. According to reports, the committee was informed that individuals and firms conducting cryptocurrency transactions are required to report their activities to the Financial Monitoring Unit (FMU), which then forwards the information to the Federal Investigation Agency (FIA) for further scrutiny.
During the committee meeting, SBP Executive Director Sohail Jawad addressed those present, confirming that the directive first adopted in 2018 remains in force. However, the central bank also mentioned that it is currently coordinating actions with the financial department and the recently formed Pakistan Cryptocurrency Council (PCC) to develop a comprehensive regulatory framework for digital assets in the country.
Participants question the SBP's clarifications amid broader crypto promotion.
Although the SBP has been quite clear in its clarifications, participants were not convinced of its position on digital assets. Finance Minister Imdad Ullah Bosal asserted in the committee briefing that digital assets are banned. He noted that if they were not banned, those dealing with the assets would not have to face investigations from the relevant authorities, including FMU and FIA.
The Finance Minister also responded to questions about why the Pakistan Cryptocurrency Council (PCC) was formed without consultations with Parliament or the SBP. He mentioned that the task force was created under the directive of Prime Minister Shehbaz Sharif through decrees. He added that the PCC takes on an advisory role, aimed at proposing a legal and procedural way forward for the crypto industry.
Details of the planned allocation of 2000 megawatts of electricity for cryptocurrency mining and AI data centers were also at the briefing, where committee member Mirza Ikhtiyar Baig discussed the government's priorities. He mentioned that such efforts should be directed towards supporting the local industry in Pakistan. The country announced this step earlier this month, sparking debates about the country's further stance on cryptocurrencies.
Currently, Pakistan ranks among the top ten countries in terms of cryptocurrency adoption, having previously held third place according to the Global Crypto Index. With over 20 million active users and around 20 billion dollars in cryptocurrency transactions, the potential for crypto innovations in the country remains high. The country also sees about 35 billion dollars in annual remittances, and experts note that it could benefit from blockchain-based financial solutions.
Meanwhile, the Standing Committee on Finance is expected to convene its next meeting with SBP, the Securities and Exchange Commission of Pakistan (SECP), and members of the Pakistan Cryptocurrency Council for further clarity on the legal and economic implications of adopting digital assets.
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