The Central Bank of Pakistan has made clear stance on digital assets

Pakistan’s state bank has made its stance on digital assets, saying it has never declared its ownership and transaction of assets illegal. A press release issued by the central bank said that previous warnings about assets were primarily precautions.

Over the past few years, Pakistan Bank has issued recommendations directing banks, microfinance institutions, development finance institutions (DFIs), electronic financial institutions (EMIs), and other financial service providers to refrain from trading on virtual assets. However, it now makes clear that the directive is not a complete ban on the trading or use of assets, but rather a measure to slow down the negative impact on the nation’s residents.

The Central Bank of Pakistan has made clear stance on digital assets

According to a statement from the bank, the recommendation was to protect financial institutions and their users.

“This recommendation was issued not because the VAS was declared illegal, but only to protect our regulated entities and their customers,” the central bank said.

However, the SBP said that by establishing a formal framework, it provides much needed clarity for the legal situation of digital assets in the country, while also ensuring that investors are protected and consumer safeguards are introduced.

The update came in the wake of a recent briefing to the Capitol Finance Committee, which suggested that it would remain trading and holdings of digital assets in Pakistan. The report said the committee was required to report activities to the Financial Surveillance Unit (FMU) and then forward them to the Federal Bureau of Investigation (FIA) for more probes.

During the committee meeting, SBP Executive Director Sohail Jawad confirmed that the directive, originally established in 2018, remained in effect and spoke to participants. However, the central bank says it is currently coordinating with the finance division with its recently formed Pakistan Cryptocourse (PCC) to design a comprehensive regulatory and legal framework for digital assets in the country.

Participants will query SBP clarification within a wider cryptography push

The SBP was very clear about clarity, but attendees were not convinced of their stance on digital assets. Treasury Secretary Imdad Ullah Bosal maintained at a committee briefing that digital assets were banned. He pointed out that if they were not banned, those dealing with the assets would not need to face investigations from relevant authorities, including the FMU and the FIA.

The Treasury Secretary also answered questions regarding why the Pakistan Cryptocourse (PCC) was established without consultation with the Parliament or the SPB. He said the task force was created under the orders of Prime Minister Shebaz Sharif through an executive order. He added that the PCC is taking on an advisory role aimed at proposing legal and procedural paths for the crypto industry.

Details of the planned allocation of 2,000 megawatts of electricity for crypto mining and AI data centres were also found at the briefing, with committee member Mirza Ikhtiyar Baig discussing government priorities. He said such efforts should be used instead to support Pakistan’s local industry. The country announced the move earlier this month, immersing discussions on the country’s future cryptography stance.

Pakistan is currently ranked among the top 10 countries for crypto adoption, previously earning its third spot according to the global crypto index. With over 20 million active users and approximately $20 billion in crypto transactions, the potential for crypto innovation in the country remains high. The country also sees remittances of around $35 billion a year, and experts point out that it can benefit from blockchain-based financial solutions.

Meanwhile, the Ministry of Finance is expected to summon Pakistan’s SBP, the Securities and Exchange Commission (SECP) and the Pakistan Crypto Council members at the next meeting to seek further clarity regarding the legal and economic impact of digital assets adoption.