In a significant policy shift, the State Bank of Pakistan (SBP) has agreed in principle to recognize digital currencies, moving away from its previous stance of an outright ban. The decision was disclosed by SBP Deputy Acting Governor Dr. Inayat Hussain during a briefing to the Senate Standing Committee on Finance. The central bank confirmed it will formally withdraw its prohibition once a comprehensive legal and regulatory framework is established, marking a pivotal moment for the financial technology sector in the country.
The framework will be built around the government’s “Virtual Assets Bill, 2025,” which was the primary focus of the committee meeting. The bill proposes the establishment of the Pakistan Virtual Asset Regulatory Authority (PVARA) as the dedicated body to license and supervise Virtual Asset Service Providers (VASPs). Its core objectives include combating money laundering, terror financing, and other illicit activities while ensuring market transparency and protecting investors in this rapidly evolving financial landscape.
The legislation is designed to foster innovation and economic growth by providing a clear regulatory path for crypto businesses. It also specifically encourages the development of Shariah-compliant virtual asset services, aiming to align Pakistan’s domestic practices with international standards and promote financial inclusion. Senators thoroughly examined the bill, recommending that PVARA should fall under the Finance Division rather than the Cabinet Division due to its financial nature.
The meeting, however, was not without controversy. A heated exchange occurred between Senator Afnan-Ullah Khan and the Secretary Law, with the senator accusing the government of copying and blocking his private member’s bill on the same subject. Following extensive discussions on other details, such as setting an age and experience limit for the future PVARA Chairperson, the committee deferred its final assent on the bill until its next meeting.
