Is Crypto Legal in Pakistan?
Cryptocurrency is legal but only partially regulated in Pakistan. The jurisdiction has a partial framework with significant gaps remaining. Securities and Exchange Commission of Pakistan is among the 3 regulators with oversight. Primary legislation: Securities Act, 2015. The FATF Travel Rule has not been adopted.
Derived from 319 sourced facts for Pakistan · last updated · primary sources
Overview
Pakistan operates under a contradictory transitional regime: SBP BPRD Circular No. 03 of 2018 prohibits all banks, microfinance banks, and payment system operators from dealing in or facilitating virtual asset transactions, yet the Virtual Assets Act, 2026 simultaneously establishes a licensing requirement for VASPs — including custodians — administered by the newly created Pakistan Virtual Assets Regulatory Authority (PVARA), with PVARA actively considering withdrawal of the SBP prohibition. Licensed VASPs are subject to FATF-aligned CDD/KYC obligations enforced through the Financial Monitoring Unit (FMU), including risk-based customer due diligence, enhanced measures for PEPs, and beneficial ownership verification, though the Travel Rule has not been adopted and no thresholds for VASP-to-VASP transfers are defined. The most decision-relevant nuance is the unresolved conflict between the standing 2018 banking prohibition and the 2026 licensing framework — a firm cannot yet assume the prohibition is lifted, and the FIA has demonstrated active enforcement willingness, including action against Binance Pakistan for alleged money laundering and non-compliance. (fmu.gov.pk, fbr.gov.pk, secp.gov.pk)
Regulatory Bodies
State Bank of Pakistan BPRD Circular No. 03 of 2018: "Caution against usage of Virtual Currencies/Coins/Tokens (VCs/VCOs/VCTs)"
SECP (Securities and Exchange Commission of Pakistan): Likely to regulate VAs, especially those that may fall under the definition of securities. https://www.secp.gov.pk/
Federal Investigation Agency (FIA) Actions: The FIA, Pakistan's premier investigation agency, has taken action against individuals and entities involved in operating unauthorized cryptocurrency exchanges or alleged crypto scams.
AMLA 2010 Link (often found on FMU or Ministry of Law & Justice websites) (PDF link to FMU website)
Operating Models
9/9 verdictsCan specific business models operate in Pakistan? Each card answers the operational question for one kind of operator. Curated cells reflect counsel-grade review; AI-generated cells should be confirmed before relying on them.
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AI · UnreviewedPrimary Legislation
| Law / Regulation | Year | Scope |
|---|---|---|
| Securities Act, 2015 | 2015 | Direct Link (SECP source usually reliable): https://www.secp.gov.pk/laws/securities-laws/ (Look for "Securities Act, 2015") |
Licensing Requirements
A standing prohibition by the State Bank of Pakistan (SBP) for regulated financial institutions to deal in or facilitate virtual assets.
Ongoing discussions and proposed legislative efforts, primarily driven by the need to comply with Financial Action Task Force (FATF) recommendations, to eventually introduce a regulatory framework.
SBP BPRD Circular No. 03 of 2018: Issued on April 06, 2018, this circular explicitly prohibits all banks, Microfinance Banks (MFBs), and Payment System Operators (PSOs)/Payment Service Providers (PSPs) from:
Dealing in Virtual Currencies/Coins/Tokens (VCs/VCOs/VCTs).
Facilitating any transaction involving VCs/VCOs/VCTs.
Maintaining accounts of individuals/entities involved in VCs/VCOs/VCTs.
Implication: This circular effectively creates a de facto ban on any regulated financial institution in Pakistan from engaging with or facilitating cryptocurrency activities. This means that:
Cryptocurrency exchanges, custody providers, and payment processors cannot legally operate with bank accounts in Pakistan or integrate with the traditional financial system.
Any individual or entity involved in crypto transactions faces significant challenges in dealing with their funds through regulated financial channels.
State Bank of Pakistan BPRD Circular No. 03 of 2018: "Caution against usage of Virtual Currencies/Coins/Tokens (VCs/VCOs/VCTs)"
Exchanges: No license. Cannot lawfully connect to the banking system.
Custody Providers: No license. Cannot lawfully connect to the banking system.
Payment Processors (Crypto-related): If processing fiat for crypto, no license and prohibited for regulated entities. If purely crypto-to-crypto, it operates outside the formal financial system but still in a legally ambiguous and high-risk environment.
FATF Recommendation 15: Which requires countries to regulate and supervise Virtual Asset Service Providers (VASPs) for Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) purposes. Pakistan's compliance with FATF recommendations is critical for its international financial standing.
Proposed Drafts: Various draft bills and frameworks have been reported in the media, suggesting that a future regime might include:
Registration: Likely for smaller or lower-risk VASP activities.
Licensing: For higher-risk activities, larger entities, or specific types of virtual assets (e.g., security tokens, if classified as securities).
SECP (Securities and Exchange Commission of Pakistan): Likely to regulate VAs, especially those that may fall under the definition of securities. https://www.secp.gov.pk/
SBP (State Bank of Pakistan): Would likely maintain oversight for payment systems and potentially for stablecoins or central bank digital currencies (CBDCs) if introduced.
VASPs would likely need to maintain a minimum paid-up capital to ensure financial stability and solvency. The exact amounts would vary based on the type and scope of services (e.g., higher for exchanges vs. simple transfer services).
AML/KYC (Anti-Money Laundering / Know Your Customer): This will be the cornerstone of any future regulation, driven by FATF compliance.
Customer Due Diligence (CDD): Robust procedures for identifying and verifying customer identities (KYC).
Enhanced Due Diligence (EDD): For higher-risk customers or transactions.
Transaction Monitoring: Systems to detect unusual or suspicious transaction patterns.
Record Keeping: Maintenance of transaction and customer data for prescribed periods.
Reporting Obligations: Reporting of suspicious transactions (STRs) and potentially cash transaction reports (CTRs) to the Financial Monitoring Unit (FMU).
Likely requirement for a physical office and local management (e.g., CEO, AML Officer) to ensure local oversight and accountability.
Management, directors, and significant beneficial owners of the VASP would need to meet "fit and proper" criteria, including checks on their financial standing, reputation, and experience.
Robust cybersecurity frameworks, data protection measures, and secure storage solutions for virtual assets (e.g., hot/cold wallet management).
Business continuity and disaster recovery plans.
Clear organizational structure, risk management policies, and internal audit functions.
Requirements for transparent disclosures, fair trading practices, and mechanisms for handling customer complaints.
Pre-Application Consultation: Optional or mandatory meetings with the regulator (e.g., SECP) to discuss the proposed business model.
Detailed business plan and financial projections.
Shareholding structure and beneficial ownership information.
Profiles of key personnel (management, directors, compliance officers).
Comprehensive AML/CFT manual and policies.
Technology architecture and security frameworks.
Due Diligence by Regulator: The regulator would conduct thorough background checks on the applicant entity, its management, and beneficial owners.
Interviews: Potential interviews with key personnel.
Review and Approval/Rejection: The regulator would review the application and, if satisfied, grant the license/registration, subject to ongoing compliance.
Post-Licensing Obligations: Continuous reporting, audits, and adherence to all regulatory requirements.
Investment Contract / Collective Investment Scheme: If a digital asset represents an investment contract, it is likely to be considered a security. This generally involves:
Investment of money/value: Funds or assets are committed.
Common enterprise: The investment is pooled with others.
Expectation of profit: The investor anticipates financial gain.
Reliance on the efforts of others: The profit is derived from the managerial or entrepreneurial efforts of the issuer or a third party, rather than the investor's own efforts.
Other Defined Securities: The Securities Act, 2015, defines "security" broadly to include:
Shares, scrips, stocks, bonds, debentures, debenture stock.
Modaraba certificates, sukuk, and other instruments creating or acknowledging indebtedness.
Any certificate of interest or participation in profit sharing, whether or not redeemable.
Any transferable share, script, stock, bond, debenture, debenture stock, or other marketable security of a like nature.
Any instrument declared by the SECP to be a security.
Security Tokens: These are digital assets that represent traditional securities like equity, debt, or funds. Examples include:
Tokenized Shares: Representing ownership in a company.
Tokenized Bonds/Sukuk: Representing a debt instrument.
Revenue-Sharing Tokens: Giving holders a right to a portion of an entity's future revenues or profits.
Investment Fund Tokens: Representing an interest in a collective investment scheme.
Tokens providing voting rights or dividends: Indicating corporate governance or profit distribution.
Utility Tokens (with investment characteristics): While intrinsically designed to provide access to a product or service, if a utility token is marketed, sold, or structured with a prominent expectation of future profit based on the issuer's efforts (especially during an initial offering), it may be reclassified as a security. The "substance over form" analysis is critical here.
Certain types of Stablecoins (depending on structure): While stablecoins are generally intended to maintain a stable value, if they are structured in a way that provides an expectation of profit from their management (e.g., through lending or staking of underlying reserves beyond simple stability mechanisms), or if they represent an interest in a pooled fund, they could potentially be deemed securities. However, the SBP's primary concern with stablecoins is their potential use as currency or e-money, and their AML/CFT implications.
Non-Fungible Tokens (NFTs): While most NFTs are considered unique digital collectibles, if an NFT is offered as part of an investment scheme with an expectation of profit from the efforts of others (e.g., fractionalized NFTs managed by a central entity, or NFTs linked to future revenue streams), it could potentially fall under the definition of a security.
Pure Payment/Currency Tokens (e.g., Bitcoin, Ethereum): Unless part of a specific investment scheme, widely decentralized cryptocurrencies are generally not considered securities by the SECP, but rather digital assets with no legal tender status by the SBP.
Public Offerings: Any public offer of a security token would require mandatory registration with the SECP. This involves filing a detailed prospectus, comprehensive disclosures about the issuer, the token, the underlying project, risks, financial statements, and other material information.
Licensing: Issuers or intermediaries involved in the offering (e.g., investment banks, brokers) must be appropriately licensed by the SECP.
The Securities Act, 2015, provides for certain exemptions from prospectus requirements, such as:
Private placements: Offerings to a limited number of sophisticated investors or institutional investors.
Small offerings: Offerings below a certain threshold (if defined by SECP rules).
Offers to existing security holders: Under specific conditions.
However, specific exemptions tailored for digital asset security offerings are yet to be fully developed and operationalized.
Licensed Exchanges: Trading would need to occur on a licensed stock exchange (e.g., Pakistan Stock Exchange) or a specifically authorized "Digital Asset Exchange" if such an entity were to be licensed by the SECP in the future. No such dedicated "Digital Asset Exchange" for security tokens currently exists.
Regulatory Oversight: All trading activities would be under the direct oversight of the SECP, ensuring market integrity, transparency, and fairness.
Market Conduct Rules: Adherence to rules against insider trading, market manipulation, and other unfair trading practices.
AML/CFT & KYC: Strict compliance with Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regulations, including Know-Your-Customer (KYC) procedures for all participants.
Central Depository: Security tokens, like other securities, might be required to be dematerialized and held in a central depository system (e.g., Central Depository Company of Pakistan Limited).
State Bank of Pakistan (SBP) Warnings: The SBP has repeatedly issued circulars and public warnings, advising financial institutions and the public against engaging in transactions involving virtual currencies, stating they are not legal tender and carry significant risks. Financial institutions are prohibited from processing transactions related to virtual currencies.
Federal Investigation Agency (FIA) Actions: The FIA, Pakistan's premier investigation agency, has taken action against individuals and entities involved in operating unauthorized cryptocurrency exchanges or alleged crypto scams. These actions are primarily based on unauthorized foreign exchange dealings, fraud, or money laundering, rather than specifically securities violations related to tokens.
Example: The FIA has investigated and arrested individuals involved in operating peer-to-peer crypto exchanges or alleged investment schemes promising high returns through crypto, branding them as fraudulent or illegal money laundering operations. This demonstrates a willingness to act against any unauthorized crypto activity.
SECP's Cautionary Stance: While developing the regulatory framework, the SECP itself has issued investor alerts warning against the risks associated with investing in unregulated digital assets.
Accessible via the SECP website or various legal databases.
Direct Link (SECP source usually reliable): https://www.secp.gov.pk/laws/securities-laws/ (Look for "Securities Act, 2015")
The SECP issued a consultation paper titled "Proposed Regulatory Framework for Digital Asset Trading Platforms" and other related documents. While a final, fully implemented framework for security tokens is still evolving, these documents outline their approach.
SECP's dedicated page for "Digital Assets": https://www.secp.gov.pk/digital-assets/
The SBP frequently issues warnings against virtual currencies.
SBP's main page for press releases/circulars: https://www.sbp.org.pk/press/index.asp
You would need to search their archives for specific circulars regarding virtual currencies, which have been issued over the years. A prominent one was PR.17/2018-SBP dated April 6, 2018, prohibiting financial institutions from dealing in virtual currencies.
AML/KYC Requirements
Anti-Money Laundering Act, 2010 (AMLA 2010): This is the overarching legislation that criminalizes money laundering and provides the legal basis for AML/CFT measures in Pakistan. It mandates reporting obligations for financial institutions and designated non-financial businesses and professions (DNFBPs).
AMLA 2010 Link (often found on FMU or Ministry of Law & Justice websites) (PDF link to FMU website)
Anti-Money Laundering (AML) Regulations, 2015: Issued by the State Bank of Pakistan under the AMLA 2010, these regulations provide detailed guidelines to financial institutions on implementing AML/CFT measures.
SBP AML Regulations 2015 Link (often found on SBP website) (PDF link to SBP website)
SBP CDD / KYC Regulations, 2022 (BPRD Circular No. 04 of 2022): This is a critical development. The State Bank of Pakistan, through its Banking Policy & Regulations Department (BPRD), issued comprehensive Customer Due Diligence (CDD) / Know Your Customer (KYC) Regulations, 2022. These regulations explicitly define and include "Virtual Asset Service Providers" (VASPs) as a type of entity that must comply with AML/CFT requirements, effectively bringing them under the regulatory ambit.
Key Aspect: These regulations define a VASP, consistent with FATF definitions, and mandate that they adhere to all the CDD/KYC obligations applicable to other financial institutions.
SBP BPRD Circular No. 04 of 2022 (CDD/KYC Regulations, 2022) (PDF link to SBP website)
Individuals: Obtain and verify full legal name, date of birth, national identity document (e.g., CNIC for Pakistani nationals, passport for foreigners), current address, contact details, and occupation/source of funds. Verification must be performed using reliable, independent source documents, data, or information.
Legal Persons/Entities: Obtain and verify legal name, principal place of business, registration number, articles of association, memorandum of understanding, board resolution, and identification of key management personnel.
Beneficial Ownership: Identify and take reasonable measures to verify the identity of the beneficial owner(s) of the customer, including for legal persons, trusts, and other legal arrangements.
Purpose and Nature of Relationship: Understand the purpose and intended nature of the business relationship or the specific transaction.
VASPs must adopt a risk-based approach to CDD. This means applying enhanced CDD measures for higher-risk customers, products, services, transactions, or geographic areas.
Factors determining risk include customer type, jurisdiction, type of virtual asset, transaction value/volume, and delivery channels.
Lower risk scenarios may allow for simplified CDD, but never complete exemption.
Regularly scrutinize transactions undertaken throughout the course of the relationship to ensure they are consistent with the VASP's knowledge of the customer, their business, and risk profile, including, where necessary, the source of funds.
Keep customer identification data and beneficial ownership information up-to-date.
Politically Exposed Persons (PEPs): Implement enhanced CDD measures for PEPs, including obtaining senior management approval for establishing business relationships, taking reasonable measures to establish the source of wealth and funds, and conducting ongoing enhanced monitoring.
Sanctions Screening: Screen customers and transactions against national and international sanctions lists (e.g., UN Security Council sanctions lists).
"Travel Rule" (FATF Recommendation 16): While the SBP CDD/KYC Regulations 2022 implicitly align with FATF standards, explicit guidance on the "Travel Rule" for VASPs (requiring the collection and transmission of originator and beneficiary information for crypto transfers above a certain threshold) may still be developing or need further specific directives. However, as Pakistan adheres to FATF standards, VASPs should anticipate and prepare for full implementation of this rule.
Trigger: Any transaction (attempted or completed) that appears unusual, lacks a clear economic or lawful purpose, is inconsistent with the customer's known profile, or raises suspicion of money laundering or terrorist financing.
Reporting Mechanism: Reports are filed electronically through the FMU's secure reporting portal.
"No Tipping Off": VASPs and their employees are prohibited from disclosing to the customer or any third party that a STR has been or will be filed.
Customer Records: All records obtained through CDD procedures, including identity documents, account files, business correspondence, and analysis of transactions.
Transaction Records: Records of all transactions, including the amount, currency, date, and details of the parties involved (both originator and beneficiary, where applicable).
Retention Period: All records (customer identification data and transaction records) must generally be kept for a minimum period of five (5) years after the business relationship has ended or after the date of the transaction.
Role: As the central bank, the SBP is the primary regulator for financial institutions and, now explicitly, for VASPs concerning AML/CFT compliance. It issues regulations, guidelines, and directives, conducts off-site and on-site supervision, and enforces penalties for non-compliance.
Role: The FMU acts as Pakistan's Financial Intelligence Unit (FIU). It is responsible for receiving, analyzing, and disseminating suspicious transaction reports (STRs) and currency transaction reports (CTRs) to law enforcement agencies.
URL: Financial Monitoring Unit (FMU)
Travel Rule
No. Pakistan has not adopted the FATF Travel Rule. This is primarily because the State Bank of Pakistan (SBP), the central bank and primary financial regulator, along with the Ministry of Finance and other relevant bodies, have taken a position against cryptocurrencies and virtual assets.
In April 2018, the SBP issued a circular prohibiting banks and other financial institutions from processing transactions for cryptocurrencies and Initial Coin Offerings (ICOs), deeming them "not legal tender." This stance has largely been reaffirmed and maintained.
Subsequent directives, often stemming from court proceedings (e.g., Sindh High Court), have further solidified this prohibitory approach.
Not applicable. Since the Travel Rule has not been adopted, there is no effective date for its implementation.
Not applicable. Without a regulatory framework for VASPs or the Travel Rule, there are no defined threshold amounts for VASP-to-VASP or VASP-to-self-hosted wallet transfers.
None. As VASPs are not legally permitted to operate in Pakistan, there are no legally covered entities that would be subject to the Travel Rule. Any entity attempting to provide VASP services in Pakistan would be doing so outside the law.
Not applicable. There are no specific technical implementation requirements for the Travel Rule, as there is no legal framework for it.
While there are no specific penalties for "Travel Rule non-compliance," individuals or entities involved in virtual asset activities in Pakistan could face penalties under existing Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) laws if their activities are deemed illicit or violate the SBP's prohibitions.
Anti-Money Laundering Act, 2010 (AMLA): This is the primary legislation for AML/CFT in Pakistan. If virtual asset transactions are used for money laundering, terrorist financing, or other illegal activities, individuals/entities would be prosecuted under this Act. Penalties can include:
Forfeiture of assets: Confiscation of property involved in or derived from money laundering.
State Bank of Pakistan Regulations: Financial institutions that violate SBP circulars regarding virtual assets could face regulatory sanctions, including fines, suspension of licenses, or other punitive measures.
Prevention of Electronic Crimes Act, 2016 (PECA): Depending on the nature of the activity, if electronic means are used for illicit VA transactions, other cybercrime laws might also apply.
State Bank of Pakistan (SBP) Circular No. 03 of 2018 (Prohibition of Cryptocurrencies):
Search Term: "SBP Circular 03/2018 Virtual Currencies"
Example of news referencing it: https://www.dawn.com/news/1399763 (News article from Dawn detailing the SBP ban, linking to the original press release)
Anti-Money Laundering Act, 2010 (AMLA) (as amended):
This is the overarching AML/CFT law.
URL (Ministry of Finance link to relevant laws): http://www.finance.gov.pk/laws_and_rules.html (You may need to navigate to find the most recent version of the AMLA).
Alternative (FMU Pakistan - often hosts updated acts): https://www.fmu.gov.pk/html/aml-cft-legal-framework.php (This page usually links to the latest version of AMLA and other relevant laws).
The FMU is Pakistan's Financial Intelligence Unit (FIU) and is responsible for receiving and disseminating financial intelligence. While they don't regulate VAs directly, they handle suspicious transaction reports for all financial crime.
Tax Reporting
State Bank of Pakistan (SBP): Has repeatedly issued warnings against dealing in cryptocurrencies, considering them illegal tender and a risk to financial stability. SBP has also restricted banks and financial institutions from processing transactions related to virtual currencies.
Reference: SBP Press Releases and Circulars (e.g., Press Release dated April 6, 2018, warning against cryptocurrencies). While specific URLs for all related circulars might change, the official stance is publicly available on the SBP website.
Securities and Exchange Commission of Pakistan (SECP): Has also cautioned the public about the risks associated with investing in virtual currencies.
Reference: SECP Investor Alerts/Press Releases.
If the capital asset (crypto) is held for one year or less, the gain is taxed at the individual's normal income tax slab rates.
If the capital asset (crypto) is held for more than one year, the gain is taxed at a flat rate of 15%.
Note: Certain exemptions or different rates apply to specific capital assets like shares of listed companies or immovable property, but these are generally not applicable to cryptocurrencies.
Capital gains from the sale of "other capital assets" are generally included in the company's taxable income and taxed at the normal corporate tax rate (currently 29% for most companies, though rates can vary for small companies, banking companies, etc.).
Federal Board of Revenue (FBR) Official Website (for Income Tax Ordinance and rates): https://www.fbr.gov.pk/ (Navigate to "Laws & Rules" -> "Income Tax Ordinance, 2001" and relevant Finance Acts for current rates).
Income from Business: If an individual or entity is frequently trading cryptocurrencies, mining them as a commercial enterprise, or providing crypto-related services (e.g., operating an exchange, providing consultancy), such activities could be classified as a "business."
Tax Rate: In this case, the net income (revenue minus allowable expenses) would be taxed at the individual's normal income tax slab rates or the corporate tax rate for companies/AOPs.
Allowable Expenses: Expenses directly incurred to generate this income (e.g., electricity for mining, software subscriptions, trading fees) would theoretically be deductible.
Income from Other Sources: If the crypto gains don't fit neatly into "capital gains" (e.g., short-term speculative gains from infrequent trading not considered a business) or "income from business," they could be classified as "income from other sources."
Tax Rate: Taxed at the individual's normal income tax slab rates or the corporate tax rate.
Cryptocurrency as an Asset: Cryptocurrencies are generally considered intangible assets, not goods or services, in most jurisdictions that have clarity. Therefore, the cryptocurrency asset itself is unlikely to be subject to Sales Tax/GST on its acquisition or sale.
Services Related to Cryptocurrency: If any service is provided in relation to cryptocurrencies (e.g., exchange fees charged by a local platform, advisory services, software services for mining pools), those services would likely be subject to Sales Tax/GST.
Rates: Sales Tax rates are generally 18% (federal) or varying provincial rates (e.g., Sindh Revenue Board - SRB, Punjab Revenue Authority - PRA, Khyber Pakhtunkhwa Revenue Authority - KPRA, Balochistan Revenue Authority - BRA).
Jurisdiction: The applicable sales tax would depend on where the service is rendered (federal for ICT/imports/specific goods, provincial for most services).
FBR Official Website (for Sales Tax Act): https://www.fbr.gov.pk/
Provincial Revenue Authorities (e.g., SRB, PRA, KPRA, BRA) Official Websites: (e.g., https://srb.gos.pk/, https://pra.punjab.gov.pk/)
Income Tax Return (ITR): Any gains or income derived from cryptocurrency activities (whether capital gains, business income, or income from other sources) must be declared in the annual income tax return.
Wealth Statement (Form A/B): All assets, including significant holdings of cryptocurrencies (if considered an asset), should ideally be disclosed in the annual wealth statement, along with their cost and fair market value. This is critical for reconciling income and assets.
Foreign Assets: If cryptocurrencies are held on foreign exchanges or wallets, they would also need to be declared as foreign assets in the wealth statement.
Income Tax Return: All income from crypto-related business activities or capital gains must be included in the company's taxable income calculation and reported in its annual income tax return.
Financial Statements: Crypto holdings and transactions should be properly reflected in the company's financial statements (balance sheet and income statement) as per applicable accounting standards.
Wealth Statement: Entities may also be required to report significant assets as part of their financial disclosures.
FBR Official Website (for Income Tax Returns and Forms): https://www.fbr.gov.pk/ (Navigate to "Online Services" -> "e-Filing" or "Forms").
Illegality/Grey Area: The SBP's stance makes dealing with crypto a legally ambiguous activity in Pakistan, even if no explicit tax law exists. This could potentially lead to enforcement actions or difficulties in claiming deductions or recognizing losses.
Tax Audit Risk: Non-disclosure of significant crypto gains or holdings could lead to FBR scrutiny and potential penalties for misrepresentation or concealment of income/assets.
Evolving Landscape: The regulatory and tax landscape for cryptocurrencies is rapidly evolving globally. Pakistan's position may change in the future.
Custody Requirements
SBP Circular (January 2018): The State Bank of Pakistan issued Circular No. 03 of 2018, titled "Prohibition of Dealing in Virtual Currencies/Tokens (VCs/ICTs)." This circular explicitly stated that VCs/ICTs are not legal tender in Pakistan and prohibited all banks, financial institutions, and payment system providers from dealing in, processing, or facilitating transactions involving VCs/ICTs.
The State Bank of Pakistan Circular No. 03 of 2018's prohibition remains in effect, but the Pakistan Virtual Assets Regulatory Authority is actively considering its withdrawal, indicating the policy is no longer settled or dominant.
Update (2022-2023): While there have been ongoing discussions and government committees formed to evaluate the possibility of regulating cryptocurrencies, no formal change to the SBP's stance or new legislation has been enacted. Reports in local media suggest that committees involving the Ministry of Finance, Law Ministry, and the SBP have explored various options, including maintaining a ban or developing a regulatory framework, often influenced by FATF recommendations.
Pakistan has enacted the Virtual Assets Act, 2026, which requires all Virtual Asset Service Providers, including cryptocurrency custodians, to obtain a license from the Pakistan Virtual Assets Regulatory Authority (PVARA).
No specific rules for the segregation of client digital assets exist. While traditional financial institutions (like banks or brokerages) have strict client asset segregation rules under the relevant banking and securities laws (e.g., Securities Act, 2015, Banking Companies Ordinance, 1962), these do not apply to unregulated digital assets.
There are no mandates for insurance or bonding requirements for digital asset custodians.
No specific mandates or best practices regarding cold storage (offline storage of private keys) for digital assets are prescribed by Pakistani regulators.
The concept of a "qualified custodian" for digital assets is not defined within Pakistan's regulatory framework. The term "qualified custodian" typically refers to institutions meeting specific criteria for safeguarding financial assets, and since cryptocurrencies are not recognized as such for regulatory purposes, no definition applies.
Government Committees: Various committees have been formed by the government (e.g., under the Ministry of Finance, sometimes involving the Law Ministry, FIA, SBP, and SECP) to study cryptocurrencies.
Reports/Recommendations (circa 2022-2023): Some reports indicated that certain government bodies (like the Law Ministry or SBP) might favor a continued ban, while others might suggest developing a regulatory framework, often to comply with Financial Action Task Force (FATF) recommendations concerning Virtual Asset Service Providers (VASPs). Pakistan is under pressure from FATF to strengthen its anti-money laundering and counter-terrorist financing (AML/CFT) regime, which includes regulating virtual assets.
Reference: News reports from reputable Pakistani financial media (e.g., Dawn, The News International, Business Recorder) frequently cover these committee meetings and their preliminary recommendations. For example:
Dawn News (January 2022): "Govt body wants to ban cryptocurrencies" - https://www.dawn.com/news/1669460 (This indicates the general sentiment, though discussions continue).
Pakistan opted not to buy urgent cargoes of LNG on the spot market, implementing a definitive policy shift rather than an unresolved regulatory consideration.
Stablecoin Regulation
No Explicit Classification: Pakistani law does not explicitly classify stablecoins as e-money, payment tokens, or securities.
Not Legal Tender: The State Bank of Pakistan has explicitly stated that virtual currencies/coins/tokens are not legal tender.
E-money/Payment Token: If a stablecoin were designed to maintain parity with the Pakistani Rupee (PKR) and facilitate payments, it could hypothetically be viewed through the lens of SBP's Electronic Money Institutions (EMI) regulations. However, stablecoins are not currently authorized EMIs.
Security: If a stablecoin represented an investment in an underlying asset pool managed by an issuer and offered features akin to investment products, the Securities and Exchange Commission of Pakistan (SECP) could potentially classify it as a security under the Companies Act 2017 or Securities Act 2015.
Current Reality: Stablecoins, like other cryptocurrencies, are simply considered "virtual assets" which are not recognized or regulated.
None: As there is no specific regulatory framework for stablecoins, there are no established reserve requirements outlined in Pakistani law for stablecoin issuers.
None: Similarly, there are no specific licensing requirements for stablecoin issuers in Pakistan. Issuing stablecoins is not a recognized or licensed activity.
None: There are no legally enforceable redemption rights for stablecoin holders under Pakistani law. The ability to redeem stablecoins for the underlying pegged asset depends entirely on the issuer's terms of service and trustworthiness, as there is no regulatory oversight.
None: Given the lack of a general framework for stablecoins, there are no specific rules or regulations for algorithmic stablecoins in Pakistan.
Exploration Stage: The State Bank of Pakistan has been actively exploring the possibility of introducing a Central Bank Digital Currency (CBDC). Governor SBP and other officials have, on various occasions, spoken about the potential benefits and challenges of a CBDC for Pakistan.
No Concrete Launch or Regulation: While exploration is underway, no CBDC has been launched or formally regulated in Pakistan yet.
Future Influence: The eventual introduction of a sovereign CBDC would likely precede or significantly influence any future regulatory approach towards private stablecoins. A state-backed digital currency could be seen as an alternative to private stablecoins, potentially leading to stricter regulations or outright prohibitions for private stablecoins to protect monetary sovereignty and financial stability.
State Bank of Pakistan (SBP) Circular No. 03 of 2018:
Title: "Caution against use of Virtual Currencies/Coins/Tokens (such as Bitcoin, Litecoin, Pakcoin, Onecoin, Dascoin, Pay Diamond etc.)"
Key Message: This circular explicitly stated that SBP has not authorized or licensed any individual or entity for the issuance, sale, purchase, exchange, or investment in Virtual Currencies/Coins/Tokens. It advised banks/financial institutions not to process, deal with, trade, or invest in VCs and warned the public about the risks involved. It clearly states VCs are not legal tender.
Reference: https://www.sbp.org.pk/circulars/2018/FECL3.pdf (This is a foundational document outlining the SBP's stance)
Anti-Money Laundering Act, 2010 (as amended):
While not specific to stablecoins, any financial activity, including transactions involving virtual assets, can fall under the purview of AML/CFT regulations if illicit activities are suspected. Financial institutions are mandated to report suspicious transactions.
Reference: https://www.fia.gov.pk/FIA_Laws_Rules/Anti%20Money%20Laundering%20Act,%202010.pdf (For the Act itself, though its direct application to VAs for legitimate activities is limited by the SBP's stance)
These regulations govern entities licensed by SBP to issue e-money. While stablecoins are not currently considered e-money under these regulations, they represent the closest existing framework for digital payment instruments. If Pakistan were to regulate stablecoins as e-money, these regulations would likely serve as a basis.
Reference: SBP's website for updated regulations, e.g., https://www.sbp.org.pk/EMIS_reg/EMIS-Reg-2022.pdf (For the Electronic Money Institutions Regulations, 2022)
The SECP has largely remained aligned with the SBP's stance on virtual assets, cautioning investors about the risks and the unregulated nature of these assets. They have not issued specific regulations for security tokens or stablecoins.
Reference: General SECP advisories related to investment risks, typically found on their official website (e.g., under investor education).
Securities Classification
Pakistan has no dedicated cryptocurrency or digital asset securities law; crypto assets are not recognized as "securities" under the Securities Act, 2015, and no license exists for crypto exchanges or digital asset brokers. Securities & Exchange Commission of Pakistan (SECP)
The Securities and Exchange Commission of Pakistan (SECP) regulates securities brokers under the Securities Act, 2015, and the Securities Brokers (Licensing and Operations) Regulations, 2016, but these rules apply only to traditional securities, not digital assets. Brokers & Agents - Licensing | SECP
SECP has not issued any license to a cryptocurrency exchange, digital asset custodian, or token issuer as of 2025–2026; the SECP maintains a public list of companies suspected of engaging in unauthorized activities, including unlicensed crypto-related entities. Securities & Exchange Commission of Pakistan (SECP)
The practical reality is that crypto businesses cannot obtain a securities license in Pakistan because the legal framework does not accommodate digital assets; any entity offering crypto brokerage or exchange services operates outside the law and faces enforcement risk. Securities & Exchange Commission of Pakistan (SECP)
SECP's regulatory sandbox exists, but it has not been publicized as accepting crypto-related fintech applications, and no crypto firm has emerged from the sandbox with a license. Securities & Exchange Commission of Pakistan (SECP)
The Securities and Exchange Commission of Pakistan (SECP) is the primary regulator for securities and capital markets in Pakistan, established under the Securities and Exchange Commission of Pakistan Act, 1997 (Act No. XLII of 1997), which came into force on December 19, 1997. The Securities and Exchange Commission of Pakistan Act, 1997 (Act No. XLII of 1997), Pakistan, WIPO Lex
SECP became operational on January 1, 1999, and its mandate includes regulation of the corporate sector and capital market, supervision of insurance companies, and regulation of non-banking finance companies and private pension schemes. Securities & Exchange Commission of Pakistan
The Securities Act, 2015 is the primary law governing securities activities in Pakistan, and it defines which activities constitute regulated securities activities; crypto assets are not classified as securities under this Act. Brokers & Agents - Licensing | SECP
The Securities Brokers (Licensing and Operations) Regulations, 2016 (SB Regulations) are the secondary legislation that prescribes eligibility conditions, licensing procedures, renewal requirements, and general obligations for securities brokers. Brokers & Agents - Licensing | SECP
The Companies Act, 2017 governs company incorporation in Pakistan, and companies engaged in specialized businesses, including financial services, must obtain a No Objection Certificate (NOC) or license from the relevant regulatory authority, which for securities would be SECP. Securities & Exchange Commission of Pakistan
SECP has issued the Companies Regulations 2024, which update corporate governance and compliance requirements for companies operating in Pakistan, but these regulations contain no provisions addressing crypto assets or digital securities. Securities & Exchange Commission of Pakistan (SECP)
Pakistan is a member of the Financial Action Task Force (FATF), and its AML/CFT regime applies to financial institutions regulated by SECP, but the legal framework does not yet extend AML obligations specifically to virtual asset service providers. Securities & Exchange Commission of Pakistan (SECP)
SECP operates a Regulatory Sandbox for innovative financial products, but the sandbox is not publicized as a pathway for crypto licensing, and no digital asset company has been reported as a sandbox participant. Securities & Exchange Commission of Pakistan (SECP)
SECP's jurisdiction covers capital markets, securities brokers, futures brokers, non-banking finance companies (NBFCs), and insurance companies, but there is no separate category for digital asset exchanges or crypto custodians within SECP's licensing structure. Securities & Exchange Commission of Pakistan (SECP)
The SECP requires all securities brokers to hold a Trading Right Entitlement Certificate (TREC) from the Pakistan Stock Exchange (PSX) as a precondition for applying for a broker license, and TRECs are only issued for exchange membership, which does not extend to crypto trading platforms. Brokers & Agents - Licensing | SECP
The SECP Act, 1997 extends to the whole of Pakistan, and Section 43 of the Act was to come into force on a date appointed by the Federal Government, indicating phased implementation of certain provisions. The Securities and Exchange Commission of Pakistan Act, 1997 (Act No. XLII of 1997), Pakistan, WIPO Lex
SECP maintains a "List of Companies suspected to be engaged in Unauthorized Activities" which is publicly available on its website, and this list includes entities that offer financial services without SECP approval. Securities & Exchange Commission of Pakistan (SECP)
The SECP Act, 1997 was adopted on December 19, 1997, and the legal text is available through WIPO Lex, confirming its status as a current and binding national law of Pakistan. The Securities and Exchange Commission of Pakistan Act, 1997 (Act No. XLII of 1997), Pakistan, WIPO Lex
SECP's mandate includes oversight of various external service providers, which encompasses auditors, credit rating agencies, and other market intermediaries, but does not include any reference to virtual asset service providers. Securities & Exchange Commission of Pakistan
The Companies Act, 2017, specifically Section 10, and Regulation 4 of the Companies Regulations govern company name availability and restrictions, which would apply to any company seeking to incorporate with "crypto," "blockchain," or "digital asset" in its name. Securities & Exchange Commission of Pakistan
No entity in Pakistan has been licensed by SECP to operate a cryptocurrency exchange, digital asset broker, crypto custodian, or token issuer; the zero-license reality is absolute as of 2025–2026. Securities & Exchange Commission of Pakistan (SECP)
Securities broker licensing in Pakistan is regulated under the Securities Act, 2015 read with the Securities Brokers (Licensing and Operations) Regulations, 2016, and the only entities eligible to apply are TREC holders of the Pakistan Stock Exchange (PSX). Brokers & Agents - Licensing | SECP
An application for a securities broker license must be made to SECP through the Pakistan Stock Exchange in terms of Regulation 5 of the SB Regulations, and SECP grants the license only if satisfied that the applicant is eligible and that granting the license is in the interest of the public and the capital market. Brokers & Agents - Licensing | SECP
The securities broker license is valid for one year only, and renewal is required annually, with the procedure for grant and renewal detailed in SECP's published checklist. Brokers & Agents - Licensing | SECP
SECP's licensing categories for capital markets include Securities Brokers, Futures Brokers, and Others, but there is no category for "Digital Asset Brokers," "Crypto Exchanges," or "Virtual Asset Service Providers." Securities & Exchange Commission of Pakistan (SECP)
Application requirements for any company in Pakistan, including companies seeking financial services licenses, require submission of Memorandum and Articles of Association, CNIC/NICOP copies of directors, NOC from relevant regulatory authorities, and registration/filing fees. Securities & Exchange Commission of Pakistan
For a small company with nominal share capital not exceeding Rs. 100,000, the total incorporation fee is Rs. 1,800 for online submission and Rs. 3,500 for offline submission, but these fees relate only to company incorporation, not to any securities or crypto license. Securities & Exchange Commission of Pakistan
Foreign companies seeking to incorporate in Pakistan must provide the company profile, details of directors, nationality and country of origin, and certified copies of the charter, statute, or memorandum and articles, but no special crypto-related licensing pathway exists for foreign firms. Securities & Exchange Commission of Pakistan
The SECP's NBFC (Non-Banking Finance Company) licensing framework exists for entities like investment banks, leasing companies, and microfinance institutions, but it does not include a license category for digital asset funds or blockchain-based financial services. Securities & Exchange Commission of Pakistan (SECP)
SECP's "Licensing" webpage lists Company Formation, Regulatory Sandbox, Capital Markets, NBFCs, and Insurance as the licensing domains, and crypto/digital assets appear nowhere in these categories. Securities & Exchange Commission of Pakistan (SECP)
The Securities Brokers (Licensing and Operations) Regulations, 2016 prescribe eligibility conditions, licensing procedures, effects of refusal, renewal, and general obligations, but all of these provisions are premised on the applicant being a TREC holder of PSX, which itself requires trading in traditional listed securities. Brokers & Agents - Licensing | SECP
SECP may refuse a license if the applicant is not in compliance with the Securities Act, 2015, the SB Regulations, or any directives, guidelines, or codes issued thereunder, meaning any entity involved in unlicensed crypto activity would fail the fit-and-proper test. Brokers & Agents - Licensing | SECP
A Trading Right Entitlement Certificate (TREC) is a prerequisite for securities broker licensing, and TRECs are issued exclusively by the Pakistan Stock Exchange for trading rights in the exchange's traditional securities market, making it impossible for a crypto exchange to obtain one under current rules. Brokers & Agents - Licensing | SECP
SECP's guide book on Securities Brokers, dated December 14, 2022, provides detailed eligibility criteria and procedures for would-be applicants, but it contains no reference to digital assets, cryptocurrencies, or blockchain tokens. Brokers & Agents - Licensing | SECP
There is no timeline for crypto licensing because there is no crypto license to apply for; the only available licensing routes are for traditional securities brokers, futures brokers, NBFCs, and insurance entities. Securities & Exchange Commission of Pakistan (SECP)
SECP regulates securities brokers, and the SB Regulations impose general obligations on brokers, which include compliance with anti-money laundering and counter-financing of terrorism (AML/CFT) requirements, but these obligations apply only to traditional securities transactions, not crypto transactions. Brokers & Agents - Licensing | SECP
SECP's oversight of external service providers includes monitoring of compliance with applicable laws, including AML rules, but Pakistan's AML/CFT framework under FATF guidelines does not yet cover virtual asset service providers as a distinct category. Securities & Exchange Commission of Pakistan
Customer due diligence (CDD) requirements for securities brokers are embedded in the SB Regulations, requiring brokers to verify client identity and maintain records, but no specific CDD protocols exist for crypto wallet verification or blockchain address screening. Brokers & Agents - Licensing | SECP
Enhanced due diligence (EDD) procedures, suspicious transaction reporting (STR), beneficial ownership identification, and PEP (politically exposed persons) screening are all part of Pakistan's AML regime for regulated entities, but these obligations have not been extended to unlicensed crypto firms operating in Pakistan. Securities & Exchange Commission of Pakistan (SECP)
Record retention requirements for securities brokers are prescribed under the SB Regulations and the Securities Act, 2015, but there is no equivalent requirement for crypto exchanges because no crypto exchanges are licensed. Brokers & Agents - Licensing | SECP
The beneficial ownership reporting framework in Pakistan applies to companies incorporated under the Companies Act, 2017, and would technically apply to any crypto company that incorporates, but SECP has not issued crypto-specific beneficial ownership guidance. Securities & Exchange Commission of Pakistan
SECP maintains a list of digital lending apps that have been approved, showing the regulator's approach to vetting fintech products, but no similar list exists for approved crypto apps or platforms. Securities & Exchange Commission of Pakistan (SECP)
The SECP eZfile portal requires user registration for company filing and annual filings, and all companies incorporating in Pakistan must file through this system, but the system has no crypto-specific filing category. Securities & Exchange Commission of Pakistan (SECP)
SECP maintains and publishes a "List of Companies suspected to be engaged in Unauthorized Activities" on its website, which serves as a public warning about entities offering financial services without SECP licenses, including potential crypto firms. Securities & Exchange Commission of Pakistan (SECP)
SECP operates a specialized "XS Complaint Portal" allowing the public to file complaints about unauthorized financial activities, and complaints related to crypto scams or unlicensed crypto exchanges would fall within this mechanism. Securities & Exchange Commission of Pakistan (SECP)
SECP has issued warnings to the general public to only download approved digital lending apps, demonstrating the regulator's enforcement posture toward unlicensed fintech services, and similar warnings would apply to unlicensed crypto apps. Securities & Exchange Commission of Pakistan (SECP)
The SECP's Securities and Deposits Management System (SDMS) has specified call timings for public queries, indicating an active monitoring and response mechanism for investor complaints, including those related to unauthorized securities activities. Securities & Exchange Commission of Pakistan (SECP)
Companies involved in unauthorized securities activities, including any crypto entities claiming to offer securities-like products, are subject to SECP's power to refuse licenses, revoke existing licenses, and take enforcement action under the Securities Act, 2015. Brokers & Agents - Licensing | SECP
SECP's Appellate Bench and its rules exist for companies to challenge SECP orders, but there is no public record of any crypto firm successfully challenging an enforcement action. Securities & Exchange Commission of Pakistan (SECP)
No tax guidance has been issued for virtual assets in Pakistan, and neither the SECP nor the Federal Board of Revenue has published specific rules on how crypto gains, staking rewards, or token sales should be taxed. Securities & Exchange Commission of Pakistan (SECP)
The SECP does not address taxation in any of its licensing or regulatory frameworks for securities brokers, and the SB Regulations contain no provisions on tax treatment of securities gains, let alone crypto gains. Brokers & Agents - Licensing | SECP
Pakistan's general tax framework under the Income Tax Ordinance would technically apply to any income generated in Pakistan, including crypto trading profits, but without specific FATF-aligned or SECP-issued guidance, the treatment remains ambiguous. Securities & Exchange Commission of Pakistan (SECP)
Capital gains tax rules in Pakistan apply to securities listed on PSX, but since crypto assets are not listed on PSX and are not recognized as securities, the capital gains framework cannot be directly applied to crypto. Brokers & Agents - Licensing | SECP
The most significant gap is the complete absence of a legal definition for "cryptocurrency," "virtual asset," or "digital token" in Pakistan's securities laws, meaning SECP lacks jurisdiction over these instruments unless they fall under the broad category of "securities" under the Securities Act, 2015, which they currently do not. Securities & Exchange Commission of Pakistan (SECP)
There is no licensing pathway for crypto exchanges or digital asset service providers, so any legitimate business seeking to operate in Pakistan cannot obtain legal authorization and must either operate illegally or leave the country. Brokers & Agents - Licensing | SECP
The TREC requirement for securities broker licensing creates a structural barrier for crypto companies, as TRECs are only available through PSX membership, which is limited to traditional securities markets. Brokers & Agents - Licensing | SECP
AML/KYC obligations are not enforceable against crypto firms because there is no legal framework requiring them to register with SECP, conduct CDD, or file STRs, creating a high money-laundering risk in the sector. Securities & Exchange Commission of Pakistan (SECP)
FATF compliance pressure on Pakistan may eventually force the government and SECP to introduce crypto regulation, but as of 2025–2026, no draft law or consultation paper has been published. Securities & Exchange Commission of Pakistan (SECP)
SECP's regulatory sandbox is theoretically open to fintech innovations, but the lack of publicized crypto applications and the absence of any crypto license issued to a sandbox participant indicates that SECP has not operationalized a pathway for digital assets. Securities & Exchange Commission of Pakistan (SECP)
The SECP's "List of Companies suspected to be engaged in Unauthorized Activities" is a reactive enforcement tool, not a proactive licensing gateway, meaning crypto firms are warned only after they begin operating illegally. Securities & Exchange Commission of Pakistan (SECP)
A business seeking to incorporate in Pakistan using "crypto" or "blockchain" in its name would face challenges under Section 10 of the Companies Act, 2017 and Regulation 4 of the Companies Regulations, which restrict registration of companies engaged in activities that are not legally recognized. Securities & Exchange Commission of Pakistan
General public confusion persists because SECP's website lists "Digital Lending Apps" as an approved category, suggesting fintech is welcome, but no equivalent exists for "Digital Asset Apps" or "Crypto Trading Platforms." Securities & Exchange Commission of Pakistan (SECP)
The SECP Act, 1997 establishes SECP's powers over "corporate entities" and "capital markets," but the Act predates Bitcoin (2009) and blockchain technology, and its provisions cannot be interpreted to cover crypto assets without legislative amendment or new secondary legislation. The Securities and Exchange Commission of Pakistan Act, 1997 (Act No. XLII of 1997), Pakistan, WIPO Lex
Securities & Exchange Commission of Pakistan (SECP)
Brokers & Agents - Licensing | SECP
Securities & Exchange Commission of Pakistan
The Securities and Exchange Commission of Pakistan Act, 1997 (Act No. XLII of 1997), Pakistan, WIPO Lex
Sanctions & Restrictions
Sanctions data collection in progress.
Enforcement Actions
Entity Targeted: Binance Pakistan (and implicitly, individuals running scam schemes facilitated through Binance). Violation Type: Alleged involvement in multi-million dollar cryptocurrency scam, money laundering, illegal financial transactions, non-compliance with local regulations. The FIA issued a formal notice to Binance's Global Head of Growth for its alleged role in facilitating fraudulent transactions that led to significant financial losses for Pakistani citizens. Penalty Amount: No direct fine was publicly levied against Binance by Pakistani authorities. The "penalty" was primarily investigative pressure, a formal inquiry, and a demand for cooperation, which could have led to further action or reputational damage. The FIA initiated criminal proceedings against individuals involved in the scam. Outcome: The FIA launched an inquiry and issued a formal notice to Binance, demanding details and cooperation. Binance subsequently stated its commitment to cooperate with the FIA and local authorities. The FIA also identified and initiated action against 11 individuals alleged to be masterminds of a multi-million dollar fraud scheme involving Binance. The action highlighted the government's serious concerns about unregulated crypto activities. While Binance itself wasn't fined, the action put significant pressure on the exchange and warned the public.
Research & Articles
Regulatory Forecast
high confidenceLikely regulatory action expected around 2027-02-02
Based on 52 historical regulatory events for Pakistan, averaging every 205 days, with increasing regulatory activity.
Recent Updates
SBP Circular (January 2018): The State Bank of Pakistan issued Circular No. 03 of 2018, titled "Prohibition of De...
SBP Circular (January 2018): The State Bank of Pakistan issued Circular No. 03 of 2018, titled "Prohibition of Dealing in Virtual Currencies/Tokens (VCs/ICTs)." This circular explicitly stated that VCs/ICTs are not legal tender in Pakistan and prohibited all banks, financial institutions, and payment system providers from dealing in, processing, or facilitating transactions involving VCs/ICTs.
Ongoing Government Stance: The State Bank of Pakistan (SBP) maintains that cryptocurrencies are not legal tender ...
Ongoing Government Stance: The State Bank of Pakistan (SBP) maintains that cryptocurrencies are not legal tender and has advised against their use. An inter-ministerial committee has been discussing a potential blanket ban, but no final legislative decision has been reached by the parliament.
SBP BPRD Circular No. 03 of 2018: Issued on April 06, 2018, this circular explicitly prohibits all banks, Microfi...
SBP BPRD Circular No. 03 of 2018: Issued on April 06, 2018, this circular explicitly prohibits all banks, Microfinance Banks (MFBs), and Payment System Operators (PSOs)/Payment Service Providers (PSPs) from:
Implication: This circular effectively creates a de facto ban on any regulated financial institution in Pakistan ...
Implication: This circular effectively creates a de facto ban on any regulated financial institution in Pakistan from engaging with or facilitating cryptocurrency activities. This means that:
State Bank of Pakistan BPRD Circular No. 03 of 2018: "Caution against usage of Virtual Currencies/Coins/Tokens (VCs...
State Bank of Pakistan BPRD Circular No. 03 of 2018: "Caution against usage of Virtual Currencies/Coins/Tokens (VCs/VCOs/VCTs)"
Exchanges: No license. Cannot lawfully connect to the banking system.
Exchanges: No license. Cannot lawfully connect to the banking system.
Custody Providers: No license. Cannot lawfully connect to the banking system.
Custody Providers: No license. Cannot lawfully connect to the banking system.
Proposed Drafts: Various draft bills and frameworks have been reported in the media, suggesting that a future reg...
Proposed Drafts: Various draft bills and frameworks have been reported in the media, suggesting that a future regime might include:
SBP (State Bank of Pakistan): Would likely maintain oversight for payment systems and potentially for stablecoins...
SBP (State Bank of Pakistan): Would likely maintain oversight for payment systems and potentially for stablecoins or central bank digital currencies (CBDCs) if introduced.
Other Defined Securities: The Securities Act, 2015, defines "security" broadly to include:
Other Defined Securities: The Securities Act, 2015, defines "security" broadly to include:
State Bank of Pakistan (SBP) Warnings: The SBP has repeatedly issued circulars and public warnings, advising fina...
State Bank of Pakistan (SBP) Warnings: The SBP has repeatedly issued circulars and public warnings, advising financial institutions and the public against engaging in transactions involving virtual currencies, stating they are not legal tender and carry significant risks. Financial institutions are prohibited from processing transactions related to virtual currencies.
SECP's Cautionary Stance: While developing the regulatory framework, the SECP itself has issued investor alerts w...
SECP's Cautionary Stance: While developing the regulatory framework, the SECP itself has issued investor alerts warning against the risks associated with investing in unregulated digital assets.
Not Legal Tender: The State Bank of Pakistan has explicitly stated that virtual currencies/coins/tokens are not l...
Not Legal Tender: The State Bank of Pakistan has explicitly stated that virtual currencies/coins/tokens are not legal tender.
None: As there is no specific regulatory framework for stablecoins, there are no established reserve requiremen...
None: As there is no specific regulatory framework for stablecoins, there are no established reserve requirements outlined in Pakistani law for stablecoin issuers.
Exploration Stage: The State Bank of Pakistan has been actively exploring the possibility of introducing a Centra...
Exploration Stage: The State Bank of Pakistan has been actively exploring the possibility of introducing a Central Bank Digital Currency (CBDC). Governor SBP and other officials have, on various occasions, spoken about the potential benefits and challenges of a CBDC for Pakistan.
Prohibition for Financial Institutions: The State Bank of Pakistan (SBP) has explicitly prohibited financial inst...
Prohibition for Financial Institutions: The State Bank of Pakistan (SBP) has explicitly prohibited financial institutions from dealing in, processing, or facilitating transactions involving virtual currencies.
Active Enforcement Against Illegal Exchanges: Law enforcement agencies, particularly the Federal Investigation Ag...
Active Enforcement Against Illegal Exchanges: Law enforcement agencies, particularly the Federal Investigation Agency (FIA), actively pursue and investigate individuals and entities operating or promoting unregistered crypto exchanges or involved in crypto-related scams.
State Bank of Pakistan (SBP): The central bank, responsible for monetary policy, financial stability, and regulat...
State Bank of Pakistan (SBP): The central bank, responsible for monetary policy, financial stability, and regulating banks and financial institutions. It has been the primary authority in issuing prohibitions.
Securities and Exchange Commission of Pakistan (SECP): Regulator for capital markets, corporate sector, and non-b...
Securities and Exchange Commission of Pakistan (SECP): Regulator for capital markets, corporate sector, and non-banking financial institutions. While not issuing a direct ban like SBP, it has issued public warnings regarding the risks.
Federal Investigation Agency (FIA): A federal law enforcement agency responsible for combating financial crimes, ...
Federal Investigation Agency (FIA): A federal law enforcement agency responsible for combating financial crimes, cybercrime, and money laundering. FIA has been active in taking action against individuals and entities involved in alleged illegal crypto activities.
State Bank of Pakistan (SBP): Has repeatedly issued warnings against dealing in cryptocurrencies, considering the...
State Bank of Pakistan (SBP): Has repeatedly issued warnings against dealing in cryptocurrencies, considering them illegal tender and a risk to financial stability. SBP has also restricted banks and financial institutions from processing transactions related to virtual currencies.
Illegality/Grey Area: The SBP's stance makes dealing with crypto a legally ambiguous activity in Pakistan, even i...
Illegality/Grey Area: The SBP's stance makes dealing with crypto a legally ambiguous activity in Pakistan, even if no explicit tax law exists. This could potentially lead to enforcement actions or difficulties in claiming deductions or recognizing losses.
State Bank of Pakistan (SBP) Circular No. 03 of 2018 (Prohibition of Cryptocurrencies):
State Bank of Pakistan (SBP) Circular No. 03 of 2018 (Prohibition of Cryptocurrencies):
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