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Is Pakistan planning to legalise crypto?
According to several media reports, the cash-strapped country may be considering the move to create revenue and generate foreign investment.
Pakistan, which has for long been struggling with a fiscal crisis, has taken several loans from the International Monetary Fund (IMF).
The development comes after Pakistan last week announced it had formed Pakistan Crypto Council (PCC) headed by Finance Minister Muhammad Aurangzeb.
The PCC will regulate, promote, and incorporate blockchain and cryptocurrency innovations into Pakistan’s economic framework.
A ruling party Senator had in January introduced the “Virtual Assets Bill 2025’ to regulate crypto and blockchain.
But what happened? What do we know? Why is Pakistan doing this?
Let’s take a closer look:
What happened?
Bloomberg reported that Pakistan is contemplating establishing a legal system to support cryptocurrency trading.
Bilal bin Saqib, chief executive officer at Pakistan Crypto Council, told Bloomberg TV that Pakistan wants a clear regulatory framework to oversee digital-assets.
The idea is aimed at providing a fillip to the local economy.
Saqib was recently appointed the crypto adviser to the Pakistani Finance Minister.
According to Forbes, Saqib is a Web3 investor, strategic advisor, and thought leader in the blockchain space.
“Pakistan is done sitting on the sidelines, we want to have regulatory clarity. We need to have a legal framework that is pro-business. We want Pakistan as a leader in blockchain-powered finance, and we want to attract international investment because Pakistan is a low-cost, high-growth market with 60 per cent of the population under 30,” Saqib was quoted as saying.
Saqib said Pakistan was one of the biggest adopters of crypto.
“Some 15 to 20 million Pakistanis hold crypto today. The country possesses billions of US dollars in crypto transactions, so of course we want to make this legal.”
“We want to have a clear regulatory framework so we can bring in investments and we can let the ecosystem flourish in Pakistan,” he said.
As per Business Standard, the development comes despite Pakistan’s central bank for years warning that fraud, money laundering, and financial instability would result from legalising crypto.
Why is Pakistan doing this?
Because the country is struggling to resolve its fiscal crisis.
This despite the IMF recently approving a $7 billion loan for Islamabad last year.
The first installment of the loan is currently under review.
If successful, Pakistan will receive an additional $1 billion from the IMF – which is its fifth largest creditor.
Since 1958, Pakistan has relied heavily on the IMF for bailouts.
In fact, it has taken nearly two dozen loans from the group.
Pakistan recently sought a $1.4 billion loan from China – its largest creditor. Beijing just last week rolled over a $2 billion loan to Islamabad.
According to the Business Standard, if Pakistan legalises crypto, it can generate income through taxation of capital gains and trading.
This would give it access to an entirely new revenue stream.
The News reported that it was the IMF that suggested that the Pakistan Federal Board of Revenue legalise crypto in order to pare down its debt.
Brecorder.com quoted Bilal as saying Pakistan was looking at a “balanced pro-growth tax structure” to lure in foreign investment.
Bilal claimed crypto can ‘supercharge’ Pakistan’s nascent fintech sector.
Bilal called US President Donald Trump’s return to the White House as the “biggest, bullish catalyst for crypto in history.”
Referring to Trump’s flurry of executive orders on crypto, Bilal said the US president is “essentially flipping the script.”
“That means that the largest economy in the world is treating it like a valuable national asset, similar to how it stockpiles gold or oil for economic security and strength. Trump is making crypto a national priority and every country including Pakistan will have to follow suit or will we be at the risk of being left behind,” he said.
He said Trump’s actions on crypto as part of the reason Pakistan is making the move.
“Trump is making crypto a national priority and every country including Pakistan will have to follow suit,” he told Bloomberg.
Trump recently signed an executive order establishing a government reserve of bitcoin, a key marker in the cryptocurrency’s journey towards possible mainstream acceptance.
Under Trump’s new order, the US government will retain the estimated 200,000 bitcoin it’s already seized in criminal and civil proceedings, according to Trump’s “crypto czar” David Sacks.
“The US will not sell any bitcoin deposited into the Reserve. It will be kept as a store of value. The Reserve is like a digital Fort Knox for the cryptocurrency often called ‘digital gold,’” Sacks said on social media.
The executive order also creates a “U.S. Digital Asset Stockpile,” where the government will hold seized cryptocurrencies other than bitcoin.
Bitcoin went on a record run after Trump returned to office.
However, it has since cooled off.
Bitcoin is the oldest and most popular cryptocurrency. Created in response to the 2008 financial crisis by an anonymous person or persons, it has blossomed from an experiment by libertarian cryptography enthusiasts into an asset with a market cap of about $1.7 trillion.
While it hasn’t taken off as a way to pay for everyday things, bitcoin has found popularity as a store of value that’s not controlled by banks, governments or other powerful entities.
What about India’s stance on crypto?
India does not regulate Bitcoin and crypto.
The government has repeatedly said that they are not considered legal tender.
Finance Minister Nirmala Sitharaman in her budget speech has proposed including “virtual digital assets” under undisclosed income.
“It is proposed to add the term ‘virtual digital asset’ to the said definition of undisclosed income of the block period,” the Budget document said.
“The time-limit for completion of block assessment is proposed to be made as twelve months from end of the quarter in which the last of the authorisations for search or requisition has been executed,” it added.
The previous RBI governor Shaktikanta Das warned that crypto carries a huge risk to financial stability and monetary stability.
“I am actually of the opinion that this is something which should not be allowed to dominate the financial system because it has huge financial stability risks, it has huge monetary stability risks, and it also poses risks to the banking system. It may create a situation where the central bank could lose control of the money supply in the economy,” RBI Governor Shaktikanta Das said during his appearance at the Peterson Institute for International Economics, a think tank.
“If the central bank loses control of money supply in the economy, how does the central bank check liquidity available in the system? How does a central bank control inflation by squeezing money supply or by loosening money supply in times of crisis? So, we see crypto as a big risk, and there has to be an international understanding because the transactions are cross-country,” he said in response to a question.
“There has to be an international understanding on this issue, being fully mindful of the huge risks associated with cryptocurrencies. This is not something which I feel should be encouraged. This view is not a very popular one, but I think as custodians of financial stability, it is a major concern for central banks worldwide. Governments are also becoming increasingly aware of the possible downside risks in cryptocurrencies,” Das said.
With inputs from agencies