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Pakistan

Retail_Trading_Status

Gray-Zone High Confidence
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Analysis ID
#580
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Created
2025-12-11 06:43
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Executive Summary

Pakistan's cryptocurrency regulatory environment remains in a Gray-Zone as of December 2025, characterized by overlapping initiatives and transitional frameworks. While the government promulgated the Virtual Assets Ordinance 2025 establishing PVARA and earlier created the Pakistan Crypto Council (PCC) and Pakistan Digital Assets Authority (PDAA), the SBP's 2018 banking prohibition remains in effect. The regulatory landscape is evolving from restriction toward regulated adoption, with new taxation frameworks emerging, though the temporary nature of the Ordinance and pending parliamentary approval creates legal uncertainty.

Key Pillars

  • State Bank of Pakistan (SBP): Primary financial regulator maintaining banking prohibition
  • Pakistan Virtual Assets Regulatory Authority (PVARA): Proposed lead regulator under 2025 Ordinance
  • Federal Board of Revenue (FBR): Developing taxation framework for crypto assets
  • Pakistan Crypto Council (PCC) & PDAA: Advisory bodies for blockchain promotion
  • FATF Compliance: Core focus on AML/CTF standards for VASPs
  • Federal Investigation Agency (FIA): Enforcement authority

Landmark Laws

  • BPRD Circular No. 03 of 2018 (2018-04-06): Banking prohibition on crypto transactions
  • Virtual Assets Ordinance 2025 (2025-07-08): Temporary legislation establishing PVARA and licensing regime
  • SBP Act Amendment Proposal (2025-11-04): Draft amendments for CBDC and potential digital asset recognition

Considerations

  1. Banking Access: Financial institutions prohibited from facilitating crypto transactions
  2. Legal Framework: Virtual Assets Ordinance requires parliamentary approval for permanence
  3. Regulatory Overlap: Multiple authorities (PVARA, PCC, PDAA) with unclear jurisdictional boundaries
  4. FATF Compliance: Strong focus on AML/CTF requirements for future licensing
  5. Tax-Legality Conflict: FBR's taxation plans conflict with SBP's restrictive stance

Notes

The regulatory landscape shows signs of transition from restriction to regulated adoption, though implementation remains incomplete. The coexistence of multiple regulatory bodies (PVARA, PCC, PDAA) suggests institutional competition in shaping the future framework.

Remaining Uncertainties

  • Status of Virtual Assets Ordinance 2025 parliamentary approval
  • Timeline for potential revocation of SBP's 2018 banking prohibition
  • Implementation schedule for PVARA licensing regime
  • Resolution of jurisdictional overlap between PVARA, PCC, and PDAA

Detailed Explanation

Pakistan's cryptocurrency regulatory framework is characterized by overlapping initiatives and transitional measures. The foundational restriction remains the SBP's 2018 circular prohibiting banks from facilitating crypto transactions. However, 2025 brought multiple developments suggesting a shift toward regulated adoption.

The Virtual Assets Ordinance 2025 established PVARA as a dedicated regulatory authority, building upon earlier initiatives including the PCC and PDAA. These bodies represent different approaches to crypto regulation, with PVARA focused on licensing and compliance, while PCC and PDAA serve advisory and promotional roles.

Taxation has emerged as a key consideration, with the FBR developing frameworks to capture crypto gains. This creates tension with the SBP's restrictive stance, exemplifying the complex transition period. FATF compliance requirements, particularly regarding AML/CTF standards, remain central to regulatory design.

The temporary nature of the Ordinance and need for parliamentary approval creates significant legal uncertainty. Meanwhile, enforcement actions by the FIA against unregulated trading continue, highlighting the practical challenges of the current framework.

Full Analysis Report

Pakistan's cryptocurrency regulatory environment exemplifies a complex transition from restriction toward regulated adoption. The foundation remains the SBP's 2018 banking prohibition, which continues to prevent financial institutions from processing crypto transactions. However, 2025 brought significant developments with the establishment of multiple regulatory bodies and frameworks.

The Virtual Assets Ordinance 2025 represents the most concrete step toward regulation, establishing PVARA as a dedicated authority for crypto oversight. This builds upon earlier initiatives including the Pakistan Crypto Council (PCC) and Pakistan Digital Assets Authority (PDAA), though jurisdictional boundaries remain unclear.

A key development is the emergence of taxation frameworks, with the FBR actively working to capture crypto gains despite the ongoing banking restrictions. This creates a paradoxical situation where crypto activities are simultaneously restricted by banking rules yet recognized for tax purposes.

The temporary nature of the Ordinance and pending parliamentary approval creates significant legal uncertainty. Meanwhile, FATF compliance remains central to regulatory design, particularly regarding AML/CTF requirements for future licensed VASPs.

Source Evidence

Primary and secondary sources cited in this analysis

Prohibition of dealing in Virtual Currencies/Tokens primary (central_bank)
2018-04-06

"Banks/DFIs/Microfinance Banks and PSOs/PSPs are advised to refrain from processing, using, trading, holding, transferring value, promoting and investing in Virtual Currencies/Tokens."

Virtual Assets Ordinance 2025 Promulgation primary (official_gazette)
2025-07-08

"Establishment of Pakistan Virtual Assets Regulatory Authority (PVARA) as primary regulator for virtual assets"

SBP Clarification on Crypto Legality primary (central_bank)
2025-05-30

"SBP maintains prohibition while reviewing regulatory frameworks"

Web Sources (14)

Sources discovered via web search grounding

Search queries used (5)
  • is crypto trading legal in Pakistan 2025
  • FBR tax on cryptocurrency Pakistan 2025
  • Pakistan cryptocurrency regulation status 2024 2025
  • State Bank of Pakistan crypto circular 2018 current status
  • Sindh High Court cryptocurrency case update 2024
theprint.in

https://theprint.in/world/pakistans-crypto-deal-with-binance-why-asim-munir-even-isi-are-in-the-picture/2800518/

phoneworld.com.pk

https://www.phoneworld.com.pk/cryptocurrency-tax-in-pakistan-2025/

brecorder.com

https://www.brecorder.com/news/40390133

fafen.org

https://fafen.org/pvar-ordinance-is-crypto-now-legal-in-pakistan/

brecorder.com

https://www.brecorder.com/news/40387473/legislation-on-cryptocurrency-fbr-starts-consultations-with-experts

alaainvest.com

https://alaainvest.com/how-to-legally-invest-in-cryptocurrency-in-pakistan-step-by-step-guide-2025-update/

brecorder.com

https://www.brecorder.com/news/40379729

unlock-bc.com

https://www.unlock-bc.com/132061/pakistans-state-bank-proposes-legalization-digital-assets/

lightspark.com

https://www.lightspark.com/knowledge/is-crypto-legal-in-pakistan

dunyanews.tv

https://dunyanews.tv/en/Pakistan/903584-sindh-top-judge-says-amendments-to-laws-must-for-virtual-assets-crypt

hktdc.com

https://research.hktdc.com/en/article/MjA5OTc0NzY5Nw

pakistantoday.com.pk

https://profit.pakistantoday.com.pk/2025/05/30/sbp-scrambles-to-clarify-crypto-is-not-illegal-as-government-sends-mixed-signals/

pakistantoday.com.pk

https://profit.pakistantoday.com.pk/2025/10/15/fbr-begins-consultation-to-regulate-and-tax-cryptocurrency-in-pakistan/

sindhhighcourt.gov.pk

https://sindhhighcourt.gov.pk/news_notifications.php

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