Pakistan Moves to Regulate Cryptocurrencies with Groundbreaking Bill

ISLAMABAD: Pakistan is taking a significant step toward regulating its burgeoning digital asset market. Senator Dr. Afnan Ullah Khan, a member of the ruling party, introduced the “Virtual Assets Bill 2025,” aimed at creating a comprehensive regulatory framework for cryptocurrencies, blockchain technology, and digital assets.

The proposed bill lays the foundation for issuing a Digital Rupee, a central bank digital currency (CBDC) pegged to the Pakistani Rupee (PKR). The initiative aims to ensure financial stability while providing legal clarity for trading and managing virtual assets.

Key Elements of the Virtual Assets Bill 2025:

1. Virtual Asset Zones:
   Specially designated areas where cryptocurrencies can be traded and managed, adhering to strict anti-money laundering (AML) and counterterrorism financing (CTF) regulations.
2. Transparency and Accountability:
   Regular audits and mandatory reporting for entities operating in the virtual assets space to enhance trust in Pakistan’s financial system.
3. National Virtual Assets Regulatory Commission:
   A governing body responsible for:
   • Registering and licensing exchanges and service providers
   • Overseeing the issuance of Rupee-backed digital assets
   • Enforcing AML/CTF compliance
   • Conducting audits and imposing penalties for violations
4. Renewable Energy and Tax Incentives:
   Regions with surplus renewable energy or idle power plants can be designated as Virtual Asset Zones, benefiting from five-year tax incentives if AML/CTF standards are met.
5. Encouraging Foreign Investment:
   Foreign investors and entities contributing to blockchain projects or power generation will be eligible for three-year tax exemptions.
6. Revenue Allocation for Development:
   One-third of revenue from virtual asset activities will be directed toward local infrastructure and blockchain education programs.
7. Operational Requirements:
   Entities operating within these zones must demonstrate financial stability, comply with AML/CTF standards, implement robust cybersecurity measures, and maintain customer transaction records for five years.

Implications for Pakistan’s Economy
The bill positions Pakistan to modernize its financial system by integrating blockchain technology and digital currency frameworks. It is expected to boost investor confidence, mitigate financial crime risks, and foster innovation in the technology sector. The creation of a regulated environment also aligns Pakistan with global efforts to standardize cryptocurrency management while opening doors to new economic opportunities.

The Virtual Assets Bill 2025 reflects a proactive approach to balancing innovation with security, aiming to enhance Pakistan’s financial resilience and global economic standing.