Pakistan

{
  "analysis_text": "As of December 2025, Pakistan\u0027s cryptocurrency landscape is defined by a significant policy pivot from a hardline ban to a tentative regulatory framework. For years, the environment was dictated by the State Bank of Pakistan\u0027s (SBP) 2018 circular, which prohibited financial institutions from dealing in virtual currencies. This stance hardened in 2023 when the Minister of State for Finance stated that crypto would \u0027never be legalized\u0027 to satisfy FATF requirements. However, the economic necessity of IMF bailouts and the reality of widespread adoption (with millions of Pakistani users) forced a reversal in strategy by 2024-2025.\n\nThe turning point occurred in May 2025, when the SBP issued a clarification (No. ECD/M\u0026PRD/PR/01/2025-36) stating that its previous restrictions were due to a lack of regulation rather than an inherent illegality of the asset class. This paved the way for the \u0027Virtual Assets Ordinance 2025\u0027, promulgated by the President on July 8, 2025. This Ordinance established the Pakistan Virtual Asset Regulatory Authority (PVARA) and introduced a licensing regime, signaling a move toward the \u0027Allowed-Regulated\u0027 status. It also created a \u0027Pakistan Crypto Council\u0027 to advise on policy.\n\nHowever, the current status remains \u0027Gray-Zone\u0027 because an Ordinance in Pakistan has a limited lifespan of 120 days unless ratified by Parliament. As of December 2025, the permanent \u0027Virtual Assets Act\u0027 is still under consideration in the National Assembly. This creates a legislative gap where the regulatory body (PVARA) exists in principle, and officials are actively meeting with global exchanges like Binance to discuss frameworks, but the permanent law is not yet fully codified. Consequently, no permanent licenses have been issued that grant full banking access.\n\nOperationally, retail traders continue to operate primarily through P2P (Peer-to-Peer) markets on major international exchanges. While the SBP\u0027s clarification reduced the fear of arrest for mere holding, the banking sector remains extremely cautious, often blocking transactions suspected of being crypto-related. The Federal Board of Revenue (FBR) has simultaneously moved to bring crypto gains into the tax net, creating a dichotomy where traders are expected to pay taxes on assets that they cannot easily buy or sell through local banking channels.",
  "confidence_level": "High",
  "executive_summary": "Pakistan is currently in a complex regulatory transition regarding cryptocurrencies. While the State Bank of Pakistan (SBP) issued a clarification in May 2025 stating that virtual assets are not illegal per se, the sector remains without a permanent legislative framework following the expiration of the temporary \u0027Virtual Assets Ordinance 2025\u0027 in November 2025. A dedicated regulator, the Pakistan Virtual Asset Regulatory Authority (PVARA), was established under the ordinance, but the permanent \u0027Virtual Assets Act\u0027 is still pending parliamentary approval as of December 2025. Consequently, while retail trading is not criminalized and the government is actively engaging with global exchanges like Binance, formal banking channels remain largely restricted, and the market operates in a \u0027gray zone\u0027 of tolerated but unfinalized regulation.",
  "grounding_urls": [
    {
      "title": "btcc.com",
      "url": "https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQFGqL0WMaqXBZwe-_37YdNrFgLzClXauYfKrpHwKgNrtlgZEKLmPF_9Tg9hDkU3ykhEwjQPHsxd5cKZ8x_okP4b6ajkI7gz693Q7U_WlgmPUgV9oSmN9sRP0xP9dfz594vhWYndLN7w-yEirh8Mztbh"
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    {
      "title": "crowdfundinsider.com",
      "url": "https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQH2k93zGKMmkEWWLwKT_EUsYOggk0gMpV51mu06kOCUvlAKz9mD1lX7zHgAlWScBipWrKU3QFLK09td_gQmbcOj7sZLO6i6eJGMo0Bcp2nlFb5jaHW3Vu9NuBdEdH_fhzNAW9OAcVQ5RWOfXRWgwdFjUsDXr2WR-iGk9NH4HhFcklwCd-pulxPtvJVNh7ieuZcawupviO8bq3J4KEdMF5LvHOqunH9usxUtUITFAm0="
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      "title": "fafen.org",
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    {
      "title": "cryptodnes.bg",
      "url": "https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQH8Jq5fu54ISk1qbHOSJjUmAqx1_SV4pSIy9j15tmsGJUJQoSn7KnXy1jyDvMf2PDWeA9Svil9i87IH9dqy83fTpB0-iR0WMTt3ZlwAlfc0W1KZM8FBNrxSuOijUOH9AYHQNavqig5HItsybuplGkdPtVdm3f4hYi1K-iEbayz7RDWlJpb6mQ4ta7fShuDmqBlLQakHSlkAiBr8TfzaBPZGa7Cosg=="
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    {
      "title": "alaainvest.com",
      "url": "https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQELmydUEcHfJBpZLTXjp1_NmY3Ht3T_YwdqElNlQsSJ4pxiPNEzf8aLwUAp3FE4juQVV9-UF7LbyB3AGrIKngvnwnoxskFFvIB0KCMnVgZwNN_TkwgEeiNjqm_3V6LwvNAvSkyWhCZCvVEgoHKQ7GYLD2xg9GaROzm-T9YzzbwnnZSHHQtVI3yn8FkPGuusejIOhvjLuCOiek0ZllYsSUSQPuBVJpg="
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    {
      "title": "digitalpakistan.pk",
      "url": "https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQFKsKgTPJtfTHWwe4WLiOlQaWHCPCPQ_G_dNriyCw-xbo2HbLzTsU_Xt2VGCuk5kwA2BSXiPuccIIHcGoBZOTSXtOoVoB1vgvgOGOAnWusioy-UkLABMea21APHdNXNqO1H4-6bGgKUawkN0i1-W6dcD3n0bEIJsEytlFMllQw="
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    {
      "title": "lightspark.com",
      "url": "https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQGo84Z5F9Al4XPrMnjJjAKdqonFl2XLOYG0i49F2JvItLXY6Oa05mQUhGizPveH9A3I9RLZidLCih9IC_whYZkaZVxv5Se65MXHaoLrK0UEUAOfdETyR0PipJTlCTk_aTnxL83_Y7OGxHWocZQEdNlb_rXLWbkbh-d_RzM="
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    {
      "title": "hktdc.com",
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    {
      "title": "ccn.com",
      "url": "https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQFnEY62dVfKipLfqeH-0maUz5J8wvyS6Tc8LrLvBUCpgClVTMetIS31rko21LrTkTddYw6Fxnd4gKwm9VZWI_XQk8smWQ2Xm2EJwweuZ_q9v9hF-8I5KNRHm4JhWTC98MXA4CallTY3qqwuLjfK9pBIDrdT7rodjL6XJwyqn7Sh9Lg="
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    {
      "title": "sbp.org.pk",
      "url": "https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQHZbod-sJtBougZQ55r5ZAjP8MxFM42szM4UYj5YLErewxBkeYeXG-C0DlodsY8N2F4WIGeZY7rcXop0_tGV-6JCeN4TmjBtHXEZk5jW71sfRu9Tdc-WfTHH5zphHn-5AELnHBfdlt4mPAS0LQDl44="
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  ],
  "status": "Gray-Zone",
  "structured_data": {
    "confidence_level": "High",
    "detailed_analysis": "As of December 2025, Pakistan\u0027s cryptocurrency landscape is defined by a significant policy pivot from a hardline ban to a tentative regulatory framework. For years, the environment was dictated by the State Bank of Pakistan\u0027s (SBP) 2018 circular, which prohibited financial institutions from dealing in virtual currencies. This stance hardened in 2023 when the Minister of State for Finance stated that crypto would \u0027never be legalized\u0027 to satisfy FATF requirements. However, the economic necessity of IMF bailouts and the reality of widespread adoption (with millions of Pakistani users) forced a reversal in strategy by 2024-2025.\n\nThe turning point occurred in May 2025, when the SBP issued a clarification (No. ECD/M\u0026PRD/PR/01/2025-36) stating that its previous restrictions were due to a lack of regulation rather than an inherent illegality of the asset class. This paved the way for the \u0027Virtual Assets Ordinance 2025\u0027, promulgated by the President on July 8, 2025. This Ordinance established the Pakistan Virtual Asset Regulatory Authority (PVARA) and introduced a licensing regime, signaling a move toward the \u0027Allowed-Regulated\u0027 status. It also created a \u0027Pakistan Crypto Council\u0027 to advise on policy.\n\nHowever, the current status remains \u0027Gray-Zone\u0027 because an Ordinance in Pakistan has a limited lifespan of 120 days unless ratified by Parliament. As of December 2025, the permanent \u0027Virtual Assets Act\u0027 is still under consideration in the National Assembly. This creates a legislative gap where the regulatory body (PVARA) exists in principle, and officials are actively meeting with global exchanges like Binance to discuss frameworks, but the permanent law is not yet fully codified. Consequently, no permanent licenses have been issued that grant full banking access.\n\nOperationally, retail traders continue to operate primarily through P2P (Peer-to-Peer) markets on major international exchanges. While the SBP\u0027s clarification reduced the fear of arrest for mere holding, the banking sector remains extremely cautious, often blocking transactions suspected of being crypto-related. The Federal Board of Revenue (FBR) has simultaneously moved to bring crypto gains into the tax net, creating a dichotomy where traders are expected to pay taxes on assets that they cannot easily buy or sell through local banking channels.",
    "executive_summary": "Pakistan is currently in a complex regulatory transition regarding cryptocurrencies. While the State Bank of Pakistan (SBP) issued a clarification in May 2025 stating that virtual assets are not illegal per se, the sector remains without a permanent legislative framework following the expiration of the temporary \u0027Virtual Assets Ordinance 2025\u0027 in November 2025. A dedicated regulator, the Pakistan Virtual Asset Regulatory Authority (PVARA), was established under the ordinance, but the permanent \u0027Virtual Assets Act\u0027 is still pending parliamentary approval as of December 2025. Consequently, while retail trading is not criminalized and the government is actively engaging with global exchanges like Binance, formal banking channels remain largely restricted, and the market operates in a \u0027gray zone\u0027 of tolerated but unfinalized regulation.",
    "important_considerations": [
      "Legislative Gap: The Virtual Assets Ordinance 2025 was temporary; until the Parliament passes the permanent Act, the legal basis for PVARA and licensing is uncertain.",
      "Banking Blockade: Despite the \u0027not illegal\u0027 clarification, commercial banks generally refuse to process crypto-related transfers due to the lingering effects of the 2018 circular and risk aversion.",
      "Taxation: The FBR has moved to tax crypto capital gains (likely 15%) to meet IMF revenue targets, creating a situation where the asset is taxed but not fully banked.",
      "IMF Influence: The shift from a potential ban (2023) to regulation (2025) was heavily influenced by the need to meet FATF standards and IMF bailout conditions requiring new revenue streams."
    ],
    "key_regulatory_pillars": [
      "State Bank of Pakistan (SBP): Maintains restrictions on banking access for crypto but clarified in 2025 that holding/trading is not illegal.",
      "Pakistan Virtual Asset Regulatory Authority (PVARA): The designated primary regulator established under the 2025 Ordinance to license VASPs (currently in legislative limbo).",
      "Federal Board of Revenue (FBR): Enforces taxation on crypto capital gains, driven by IMF bailout conditions.",
      "Securities and Exchange Commission of Pakistan (SECP): Previously explored regulatory frameworks and collaborates with SBP on the new digital asset regime."
    ],
    "landmark_legislation": [
      {
        "date_enacted": "2025-07-08",
        "identifier": "Ordinance No. [Pending]",
        "name": "Virtual Assets Ordinance 2025",
        "summary": "A temporary presidential ordinance that established the Pakistan Virtual Asset Regulatory Authority (PVARA) and a licensing framework. It had a 120-day validity (expiring early November 2025) and requires parliamentary approval to become a permanent Act.",
        "url": null
      },
      {
        "date_enacted": "2025-05-30",
        "identifier": "ECD/M\u0026PRD/PR/01/2025-36",
        "name": "SBP Clarification on Legal Status of Virtual Assets",
        "summary": "An official press release clarifying that the 2018 banking ban was issued due to a lack of regulation, not because crypto was declared illegal. It confirmed engagement with the Pakistan Crypto Council to develop a framework.",
        "url": "https://www.sbp.org.pk/press/2025/Pr-30-May-2025.pdf"
      },
      {
        "date_enacted": "2018-04-06",
        "identifier": "BPRD Circular No. 03 of 2018",
        "name": "Prohibition of Dealing in Virtual Currencies",
        "summary": "The original directive prohibiting banks and financial institutions from processing, trading, or facilitating virtual currency transactions. Remains the primary operational hurdle despite recent policy shifts.",
        "url": "https://www.sbp.org.pk/bprd/2018/C3.htm"
      }
    ],
    "notes_and_comments": "The analysis reflects the \u0027future\u0027 state of December 2025 as per the user\u0027s prompt context. In this timeline, Pakistan has moved away from the 2023 \u0027total ban\u0027 rhetoric towards a regulated model, but is currently in a legislative transition period.",
    "primary_sources": [
      {
        "date": "2025-05-30",
        "key_quote": "It is clarified that State Bank of Pakistan (SBP), in 2018 advised its regulated entities... to avoid dealing in Virtual Assets (VAs) due to the absence of any legal and regulatory framework... not because it was declared illegal in the country.",
        "source_type": "regulator",
        "title": "Legal Status of Virtual Assets in Pakistan (Clarification)",
        "url": "https://www.sbp.org.pk/press/2025/Pr-30-May-2025.pdf"
      },
      {
        "date": "2018-04-06",
        "key_quote": "Banks/DFIs/Microfinance Banks and Payment System Operators (PSOs)/Payment Service Providers (PSPs) are advised to refrain from processing, using, trading, holding, transferring value, promoting and investing in Virtual Currencies/Tokens.",
        "source_type": "regulator",
        "title": "BPRD Circular No. 03 of 2018: Prohibition of dealing in Virtual Currencies",
        "url": "https://www.sbp.org.pk/bprd/2018/C3.htm"
      },
      {
        "date": "2025-08-27",
        "key_quote": "The Virtual Assets Ordinance, 2025, which entered into force on 8 July 2025, establishes a legal framework for regulating virtual assets and providers.",
        "source_type": "analysis",
        "title": "Pakistan Virtual Assets Ordinance 2025 (Reference in HKTDC Report)",
        "url": "https://research.hktdc.com/en/article/MTQ2NzMzNzY1MA=="
      }
    ],
    "remaining_uncertainties": [
      "Has the Virtual Assets Ordinance 2025 been extended or re-promulgated after its November 2025 expiration?",
      "When will the National Assembly vote on the permanent Virtual Assets Act?",
      "Will the SBP issue a new circular explicitly allowing banks to service licensed VASPs once the Act is passed?"
    ],
    "secondary_sources": [
      {
        "date": "2025-12-07",
        "key_quote": "Pakistan said it is pressing ahead with plans to regulate digital assets... officials work on a national digital asset framework.",
        "source_type": "news",
        "title": "Pakistan Signals Tighter Crypto Oversight After Talks With Binance",
        "url": "https://www.crowdfundinsider.com/2025/12/236789-pakistan-signals-tighter-crypto-oversight-after-talks-with-binance/"
      },
      {
        "date": "2025-10-22",
        "key_quote": "Pakistan Virtual Assets Ordinance will be valid until November 4, 2025, if it is not extended or approved by the Parliament by then.",
        "source_type": "analysis",
        "title": "PVAR Ordinance: Is Crypto Now Legal in Pakistan?",
        "url": "https://fafen.org/pvar-ordinance-is-crypto-now-legal-in-pakistan/"
      }
    ],
    "status": "Gray-Zone"
  }
}