Is Pakistan on the verge of legalising cryptocurrency? a high-stakes national gamble
Business
Despite these high-profile appointments, the situation remains legally murky.
By Arooj Anmol
Pakistan may be inching closer to legalising cryptocurrency with recent developments indicating growing government interest in digital assets. However, this move comes with a mix of optimism, strategic ambition, and serious caution.
On March 14, 2025, the government announced the formation of the Pakistan Crypto Council (PCC) and the Pakistan Digital Assets Authority, aiming to attract autonomous crypto miners, blockchain companies, and AI firms. The initiative was spearheaded by Bilal Bin Saqib, the Prime Minister’s Special Assistant on Blockchain and Cryptocurrency — a move that marks a rare inclusion of young foreign-educated technocrats into state affairs.
Adding international weight to the council, Binance co-founder Changpeng Zhao was appointed as an adviser to guide Pakistan on crypto regulation, blockchain infrastructure, and digital asset adoption.
Despite these high-profile appointments, the situation remains legally murky. Federal Finance Secretary Imdadullah Bosal clarified last week that the council was created through an executive order by the Prime Minister. However, both the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) continue to uphold a ban on crypto trading.
What is cryptocurrency?
Cryptocurrency is a fully digital form of currency with no physical notes or coins. It is not issued or regulated by any central authority or government. Cryptocurrencies like Bitcoin are created through a process called mining, which involves solving complex mathematical problems using powerful computers and substantial electricity.
While Bitcoin is considered among the most secure cryptocurrencies due to its robust blockchain and widespread adoption, it remains highly volatile and has never been recognized by any central bank as a reserve asset.
Pakistan’s strategic bitcoin reserve
The government has also announced the creation of a National Bitcoin Strategic Reserve — not for trade or speculation, but as a long-term reserve asset. According to officials, this reserve will never be sold and is meant to strengthen the country's financial infrastructure.
However, this strategy raises several questions: How can Pakistan rely on a currency so volatile and politically entangled? Could this increase the risk of scams, money laundering, or capital flight?
Potential economic impacts
Despite the concerns, there are possible economic benefits:
Utilizing Excess Electricity: Pakistan has untapped electricity capacity, especially in remote areas. If directed toward mining, it could create a new export revenue stream in the form of mined Bitcoin, potentially boosting foreign reserves.
Youth Employment and Innovation: With nearly 65% of the population under 30, Pakistan has a young, tech-savvy demographic. The crypto and blockchain sectors could open up new jobs in mining, development, and Web3 innovation.
Foreign Investment and Improved Relations: The initiative has also piqued interest from global financial entities like World Liberty Financial, supported by former U.S. President Donald Trump. A recent visit by its co-chair Zach Whitkoff highlighted investment opportunities in Pakistan, possibly strengthening U.S.-Pakistan ties.
The global context
Pakistan is not alone in this digital journey. El Salvador and the Central African Republic have adopted Bitcoin as legal tender. Iceland and Bhutan mine Bitcoin using renewable energy, exporting significant revenue without disrupting local energy needs.
However, failures like Kazakhstan’s mining-induced energy crisis and Iran’s $500 million blackout-related losses underscore the dangers of poorly managed crypto policies.
Meanwhile, global regulators are drawing strict lines:
In the US, the SEC treats most tokens as unregistered securities, while the Federal Reserve restricts banks from holding digital assets.
The UK's Financial Conduct Authority proposes stablecoin regulations without adopting them as reserves. China has outright banned private cryptocurrency, focusing instead on a state-backed digital yuan.
The legal grey zone
In Pakistan, cryptocurrency is not officially banned nor recognised as legal tender. It cannot be used for payments, nor can it be legally owned under current regulations. This legal ambiguity creates confusion for businesses and individual users alike.
A high-level meeting is scheduled to discuss a regulatory framework for virtual assets and the formation of the Pakistan Virtual Assets Regulatory Authority (PVARA). The goal is to align with global standards and integrate digital finance into Pakistan’s financial system.
Risks and challenges
The government’s move is bold, but the risks are substantial:
Scams and Security Threats: Without regulation, users are vulnerable to fraud and hacking.
Volatility: The unstable nature of cryptocurrencies could put national assets at risk.
Electricity Priorities: Pakistan struggles with power shortages, yet mining consumes large amounts of energy. Many industries are still waiting for lower electricity tariffs.
Money Laundering and Dollar Flight: Critics warn that cryptocurrencies can facilitate illicit transfers and drain dollar reserves.
The way forward
Pakistan’s crypto journey stands at a critical juncture. The country has a large unbanked population, rising digital connectivity, and a thriving freelance economy — all ideal conditions for crypto integration. But success will depend on careful regulation, renewable energy investments, public education, and transparency.
If handled wisely, cryptocurrency could become a tool for economic revival and youth empowerment. If mishandled, it risks becoming a speculative bubble that hurts the very people it aims to uplift.
The world’s experiments offer a mixed roadmap — El Salvador, Iceland, and Bhutan show what's possible with smart planning; Kazakhstan and Iran reveal the dangers of overreach. Pakistan must decide strategically whether to lead the Web3 revolution — or fall victim to it.
