SBP Agrees in Principle to Legalise Digital Currencies

ISLAMABAD: The State Bank of Pakistan (SBP) has agreed in principle to grant legal status to digital currencies, paving the way for a regulatory framework that will govern virtual assets in the country.

The development was disclosed by Acting Deputy Governor Dr. Inayat Hussain during a briefing to the Senate Standing Committee on Finance and Revenue on Wednesday. The committee, chaired by Senator Saleem Mandviwalla, met to review the Virtual Assets Bill 2025.

When asked whether Pakistanis can now purchase virtual assets, the SBP official confirmed that the central bank has given its nod in principle and is preparing a legal framework to lift existing restrictions. Once the framework is in place, SBP will withdraw earlier directives that barred the use of cryptocurrencies.

The Finance Ministry, in a written briefing, said that virtual assets are an emerging component of modern financial systems, offering opportunities for innovation, investment, and economic growth. However, they also pose regulatory challenges related to investor protection, market transparency, and financial integrity.

To address these concerns, the government promulgated the Virtual Assets Ordinance on July 8, 2025, establishing the Pakistan Virtual Assets Regulatory Authority (PVARA). The authority has been empowered to license service providers, monitor compliance, prevent illicit activities, promote financial inclusion, and introduce Shariah-compliant services.

The committee recommended that the authority be placed under the Ministry of Finance instead of the Cabinet Division. It also proposed that the chairperson’s maximum age be capped at 55 years, with at least five years’ experience in digital finance and technology.

The session also witnessed heated exchanges between Senator Afnan Ullah Khan and the Law Secretary, with the senator accusing the government of copying his private member’s bill on virtual assets. The committee later decided to propose amendments to Senate rules to avoid such controversies in the future.

The committee deferred further discussion on the bill to its next meeting.

Last month, the Pakistan Virtual Assets Regulatory Authority (PVARA) held its first board meeting, where it considered lifting the State Bank of Pakistan’s 2018 ban on virtual currencies. The board also discussed an AI-based roadmap for risk management, licensing, and regulatory frameworks.

The SBP’s BPRD Circular No. 03 of 2018 had prohibited financial institutions from dealing in virtual currencies and tokens. It clarified that cryptocurrencies such as Bitcoin, Litecoin, PakCoin, OneCoin, DasCoin, Pay Diamond, and Initial Coin Offering (ICO) tokens were neither issued nor guaranteed by the government of Pakistan and thus did not constitute legal tender.